Question

on financial statements The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $70,000 of services for clients on account. 2. Performed $40,000 of services for cash. 3. Incurred $36,000 of other operating expenses on account. Page 103 4. Paid $10,000 cash to an employee for salary. 5. Collected $47,000 cash from accounts receivable. 6. Paid $16,000 cash on accounts payable. 7. Paid an $8,000 cash dividend to the stockholders. 8. Accrued salaries were $2,000 at the end of Year 1.

Answer 1

+ Assets Cash + Alc receivabe $70,000 diabilities Au Payable + Sale Play Stakeholder Equity common stock + Revenue Eup-Dividend $ 70000 $ 40000 $40000 $ 36,000 $(36000) 3 $10000) 4 ($10,000) $(47000) 5) $47000 $(16000) 6 $(16000) $(8000) 7 $(8000) $2000 $2000) 8 $ 53000 $2000 $ 23000 $20000 $ 110000 $(48000) $(8000) $ 76000 are 1 S. $23000 $20000 b) Total anets at the end of Year 1 Balance of amounts Mceivable at the end of year1 Balance of alc payable Difference between Al receivable and alc payable $23000 - $ 20000 = $3000 +) Not Income for years. Revenue - Eupenses = $1,10,000 - $48000 = $ d) 62000

g) Amount of Net cash flow from operating activities for Year 1. Net Income $ 62000 323000) 2 $20000 den Incuase in AIR Add: Increase in Alp Add: Increase in salary payable $2000 $ 61,000 an Cash flow from operating