Question

Holloway Company started operations on January 1, Year 1. During Year 1, Holloway earned $5,400 of service revenue and collected $4,590 cash from accounts receivable. Required Based on this information alone, determine the following for Holloway Company. (Hint Record the events in a horizontal financial statements model before satisfying the requirements.) (Enter any decreases to account balances with a minus sign.) Cash - HOLLOWAY COMPANY Effect of Events on the Year 1 Horizontal Financial Statements Assets - Liabilities + Stockholders' Equity Event Accounts Common Retained Earnings Eamed revenue Collected accounts receivable 00+ Ending balance Receivable Stock a. The balance of the accounts receivable that would be reported on the December 31, Year 1, balance sheet.

Answer 1

HOLLOWAY COMPANY
Effect of Events on the Year 1 Horizontal Financial Statements
Event		Assets				Liabilities		Shareholders'Equity
		Cash	+	Accounts Receivable	=		+	Common Stock	+	Retained Earnings
Earned revenue		$                -	+	$                            5,400		$                -	+	$                       -	+	$                       5,400
Collected accounts receivable		$         4,590	+	$                          (4,590)	=	$                -	+	$                       -	+	$                              -
		$         4,590		$                                810		$                -		$                       -		$                       5,400
Answer a.	Accounts Receivable	$            810
Answer b.	Net Income	$         5,400
Answer c.	Net cash flow from operating activities	$         4,590
Answer d.	Retained earnings	$         5,400