Question

The following events pertain to Super Cleaning Company:

1. Acquired $15,700 cash from the issue of common stock.
2. Provided $13,700 of services on account.
3. Provided services for $4,700 cash.
4. Received $3,100 cash in advance for services to be performed in the future.
5. Collected $9,700 cash from the account receivable created in Event 2.
6. Paid $5,700 for cash expenses.
7. Performed $1,550 of the services agreed to in Event 4.
8. Incurred $2,200 of expenses on account.
9. Paid $1,450 cash in advance for one-year contract to rent office space.
10. Paid $1,850 cash on the account payable created in Event 8.
11. Paid a $2,200 cash dividend to the stockholders.
12. Recognized rent expense for nine months’ use of office space acquired in Event 9.

Required:
Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. Use NA to indicate accounts not affected by the event. The first event is shown as an example. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar. Enter any decreases to account balances and cash outflows with a minus sign.)

Answer 1

	Cash	Accounts Receivable	Prepaid Rent	Accounts Payable	Unearned Revenue	Common Stock	Retained Earnings	Revenue	Expenses	Net Income	Cash Flow
1	$           15,700					$           15,700					$            15,700	FA
2		$           13,700					$           13,700	$           13,700		$            13,700
3	$              4,700						$              4,700	$              4,700		$               4,700	$               4,700	OA
4	$              3,100				$              3,100						$               3,100	OA
5	$              9,700	$            (9,700)									$               9,700	OA
6	$            (5,700)						$            (5,700)		$               5,700	$             (5,700)	$             (5,700)	OA
7					$            (1,550)		$              1,550	$              1,550		$               1,550
8				$              2,200			$            (2,200)		$               2,200	$             (2,200)
9	$            (1,450)		$              1,450								$             (1,450)	OA
10	$            (1,850)			$            (1,850)							$             (1,850)	OA
11	$            (2,200)						$            (2,200)				$             (2,200)	FA
12			$            (1,088)				$            (1,088)		$               1,088	$             (1,088)
Totals	$           22,000	$             4,000	$                 362	$                 350	$             1,550	$           15,700	$             8,762	$           19,950	$              8,988	$            10,96	$            22,000

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