Question

Required information [The following information applies to the questions displayed below.) The following transactions apply to Hooper Co. for Year 1, Its first year of operations: 1. Issued $60,000 of common stock for cash. 2. Provided $90,000 of services on account. 3. Collected $78,000 cash from accounts receivable. 4. Loaned $20,000 to Mosby Co. on November 30, Year 1. The note had a one-year term to maturity and a 6 percent interest rate. 5. Paid $26,000 of salaries expense for the year. 6. Paid a $2,000 dividend to the stockholders. 7. Recorded the accrued interest on December 31, Year 1 (see item 4). 8. Estimated that 1 percent of service revenue will be uncollectible. Required a. Show the effects of these transactions in a horizontal statements model like the one shown below. (Do not round your intermediate calculation and round your final answer to the nearest whole dollar. Enter any decreases to account balances with a minus sign. 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. If there is no effect on the Statement of Cash Flow, leave the cell blank. Not all cells will require entry.) HOOPER CO. Horizontal Statements Model Event No Balance Sheet Assets NRV Cash Accounts Notes Interest Receivable Receivable Receivable 60,000 - Income Statement Equity Common Retained Stock Earnings Revenue 1. Expense Net Income Statement of Cash Flow

Answer 1

	Assets							=	Equity			Income Statement					Statement of CashFlow
	Cash	+	Acccounts Receivable	+	Notes Receivable	+	Interest Receivable	=	Common Stock	+	Retained Earnings	Revenue	-	Expenses	=	Net Income
1	$   60,000								$              60,000							$                -	$   60,000	FA
2			$                            90,000									$ 90,000				$       90,000
3	$   78,000		$                          (78,000)													$                -	$   78,000	OA
4	$ (20,000)				$                   20,000											$                -	$ (20,000)	IA
5	$ (26,000)													$ 26,000		$     (26,000)	$ (26,000)	OA
6	$   (2,000)										$                    (2,000)					$                -	$   (2,000)	FA
7							$                              100					$        100				$             100
8			$                                (900)											$        900		$           (900)