Question

Holloway Company earned $18,000 of service revenue on account during 2018. The company collected $14,000 cash from accounts receivable during 2018. Required Based on this information alone, determine the following for Holloway Company. (Hint: Record the events in general ledger accounts under an accounting equation before satisfying the requirements.) a. The balance of the accounts receivable that would be reported on the December 31, 2018, balance sheet. b. The amount of net income that would be reported on the 2018 income statement. c. The amount of net cash flow from operating activities that would be reported on the 2018 statement of cash flows. d. The amount of retained earnings that would be reported on the 2018 balance sheet. Complete this question by entering your answers in the tabs below. Accounting Equation Req A to D Based on this information alone, determine the following for Holloway Company. (Hint: Record the events in general ledger accounts under an accounting equation before satisfying the requirements.) (Enter any decreases to account balances with a minus sign.) HOLLOWAY COMPANY Effect of Events on the 2018 Accounting Equation Stockholders' Equity Assets Liabilities Event Accounts Common Retained Cash Receivable Stock Earnings Earned revenue Collected accounts receivable Ending balance

Answer 1

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	Event	Asset				Liabilities		Stockholder's Equity
		Cash	+	Accounts receivables	=		+	Common stock	+	Retained earnings
	Earned revenue		+	$          18,000	=		+		+	$        18,000
	Collected accounts receivables	$        14,000	+	$        -14,000	=		+		+
	Ending balance	$        14,000	+	$            4,000	=	$               -	+		+	$        18,000
a.	Accounts receivables		=	$            4,000
b.	Net Income		=	$          18,000
c.	Net cash flow from operating activities		=	$          14,000
d.	Retained earnings		=	$          18,000