Question

CH 2 - HW Part 1 Seved 1 The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting 10 points 1. Performed $89,500 of services for clients on account 2. Performed $51,000 of services for cash. 3. Incurred $50,000 of other operating expenses on account. 4. Paid $20,500 cash to an employee for salary. 5. Collected $65,000 cash from accounts receivable. 6. Paid $19,000 cash on accounts payable. 7. Paid a $8,000 cash dividend to the stockholders. 8. Accrued salaries were $4,200 at the end of Year 1. eBook Hint References Required a. Show the effects on the financial statements using the following horizontal statements model. In th designate operating activity, IA for investing activity, FA for financing activity, or NC for net change. the event, leave the cell blank. The first transaction is shown as an example. 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 the net income for Year 1? 9. What is the amount of net cash flow from operating activities for Year 1? Complete this question by entering your answers in the tabs below. Reg A Req B to D Req F to G Show the effects on the financial statements using the following horizontal statements model. In the cash fle financing activity, or NC for net change. If the element is not affected by the event, leave the cell blank. The decreases to account balances with a minus sign.) LEWIS AND HARPER ME Graw Milli Prey 1 of 1 !!! Next Type here to search O RI E

Answer 1

b) Total assets at the end of the year. 93000

working Note:

cash a/c and Accounts Receivable accounts are to be prepared to find their balances at the end of year 1.

cash 68500 + accounts receivable 24500

Cash a/c

Receipt	Amount	payment	Amount
Sales Accounts receivable	51000 65000 ------------------------- 116000 ==========	Salary Accounts payable Dividend Balance c/d	20500 19000 8000 68500 ---------------------- 116000 ========

Accounts Receivable a/c

Clients	89500 89500	Cash Balance c/f	65000 24500 89500

c) Balance of Accounts receivable at the end of year 1 is 24500

d) Balance of Accounts Payable at the end of year 1 is 31000

Accounts Payable a/c

Particulars	Amount	Particulars	Amount
Cash Balance c/f	19000 31000 50000	Expenses payable	50000 50000

e) Net income of year 1 140500

working Note:

services done for cash + services done on account

51000+ 89000 = 140500

f) Net cash Flow from operating Activities 76500

working Notes:

51000(Cash received from sale of services) + 65000 (cash received from accounts receivable) - 19000 (amount paid for accounts payable) - 20500 (salary paid )

Please note that divident paid should not be deducted because it is Financing Activity and salary payable is not considered because there is no cash flow.