Question

Pizza Express Inc. began the year 2 accounting period with $9,500 cash, $7,500 of common stock, and $2,000 of retained earnings. Pizza Express was affected by the following accounting events during year 2:

1. Purchased $12,500 of supplies on account.

2. Earned and collected $24,000 of cash revenue.

3. Paid $11,000 cash on accounts payable.

4. Adjusted the records to reflect the use of supplies. A physical count indicated thag $2,600 of supplies was still on hand on December 31, year 2.

Required a. Show the effects of the events on the financial statements using a horizontal statements model given below. In the Statement of Cash Flows column, use OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. The beginning balances have been recorded as an example. (Enter any decreases to account balances with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.) PIZZA EXPRESS INC. Effect of Events on Financial Statements for Year 2 Balance Sheet Income Statement Llabilities + Stockholders' Equity Revenue Revenue - Expense Expense - Net Income Not Income Accounts Common Retained Payable Stock Earnings 7,500+ 2,000 Event Assets Statement of Cash Flows + Supplies - Cash 9,500 Beg. bal. 24,000 + 24,000 24,000 24,000 24,000 ОА Totals 3 3.500 0+ 7.500 + 26,000 24,000 - 24.000

Answer 1

															Statement of Cash Flow
	Assets				Liabilities	+	Stockholder Equity			Income Statement
	Cash		Supplies	=	Account Payable	+	Common Stock	+	Retained Earnnings	Revenue		Expense		Net Income
Beg Bal	9500						7500		2000							NA
1			12500		12500											NA
2	24000								24000	24000				24000	24000	OA
3	-11000				-11000										-11000	OA
4			-9900 *						-9900			-9900		-9900		NA
	22500		2600		1500		7500		16100	24000		-9900		14100	13000	NC

Supplies adjustment 12500-2600=9900