Question

The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period:

1. Performed $82,000 of services for clients on account.
2. Performed $48,000 of services for cash.
3. Incurred $44,000 of other operating expenses on account.
4. Paid $19,000 cash to an employee for salary.
5. Collected $62,000 cash from accounts receivable.
6. Paid $36,000 cash on accounts payable.
7. Paid a $6,000 cash dividend to the stockholders.
8. Accrued salaries were $3,600 at the end of Year 1.

Required
a. Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is shown as an example. (Enter any decreases to account balances and cash outflows with a minus sign.)
b. What is the amount of total assets at the end of Year 1?
c. What is the balance of accounts receivable at the end of Year 1?
d. What is the balance of accounts payable at the end of Year 1?
f. What is net income for Year 1?
g. What is the amount of net cash flow from operating activities for Year 1?

Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flow column, use OA to des investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is shown as decreases to account balances and cash outflows with a minus sign.) LEWIS AND HARPER Statements Model For Accounting Year 1 Stockholders Equity Retained Assets Liabilities Income Statement Event No. Statement of Cash Flow Accounts Receivable Accounts able Salaries + able Cash+ Revenue-| Expense Net Income Earnin 82,000 = 82,000 82,000- 82,000 NA 2 4 Totals Req A Req B to F

Answer 1

The answer has been presented in the supporting sheets. All the parts has been solved with detailed explanation. For complete solution refer the supporting sheets.