Healthy Habits is a fitness consultant company designed to assist people in developing a healthy lifestyle....

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Healthy Habits is a fitness consultant company designed to assist people in developing a healthy lifestyle. The company began the Year 2 accounting period with $66,000 cash, $18,000 of common stock, and $48,000 of retained earnings. The company experienced the following events related to the purchase of prepaid insurance during Year 2: 1. On April 1, Year 2, paid $34,000 cash for insurance coverage on the gym for one year. 2. On December 31, Year 2, the company adjusted the accounts to reflect the amount of insurance used during Year 2. Required: Show the effects of the events on the financial statements using a horizontal statements model. The beginning balances are entered for you. Note: In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input- leave cells blank if there is no corresponding input needed. Event Number Begining Balance 1. 2. Total Assets Cash + 66,000 + 66.000 + + + Prepaid Insurance Balance Sheet 0 = Liabilities + Stockholders' Equity Accounts Payable 0 + + Net Common Retained Revenue - Expenses Income Stock Earnings 48,000 18,000 + 18,000 + Income Statement 48,000 0 - = = 0 = 0 Statement Cash Flows 0 Healthy Habits is a fitness consultant company designed to assist people in developing a healthy lifestyle. The company began the Year 2 accounting period with $66,000 cash, $18,000 of common stock, and $48,000 of retained earnings. The company experienced the following events related to the purchase of prepaid insurance during Year 2: 1. On April 1, Year 2, paid $34,000 cash for insurance coverage on the gym for one year. 2. On December 31, Year 2, the company adjusted the accounts to reflect the amount of insurance used during Year 2. Required: Show the effects of the events on the financial statements using a horizontal statements model. The beginning balances are entered for you. Note: In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, and NC for net change in cash. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells require input- leave cells blank if there is no corresponding input needed. Event Number Begining Balance 1. 2. Total Assets Cash + 66,000 + 66.000 + + + Prepaid Insurance Balance Sheet 0 = Liabilities + Stockholders' Equity Accounts Payable 0 + + Net Common Retained Revenue - Expenses Income Stock Earnings 48,000 18,000 + 18,000 + Income Statement 48,000 0 - = = 0 = 0 Statement Cash Flows 0

Answer rating: 100% (QA)

N 1 Event M Step 11 5 A 6 Total Beginning 66000 Balance 00 1 B 2 Cash 34... View the full answer