Effect of events on a horizontal financial statements modelExpert Auto Service experienced...

Effect of events on a horizontal financial statements model

Expert Auto Service experienced the following events during 2011.

1. Purchased land for cash.

2. Issued common stock for cash.

3. Collected cash for providing auto repair services to customers.

4. Paid a cash dividend to the stockholders.

5. Paid cash for operating expenses.

6. Paid cash to reduce the principal balance on a liability.

7. Determined that the market value of the land is higher than its historical cost.

Required

Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I), decreases (D), or does not affect (NA) each element of the financial statements. Also, in the Cash Flows column. classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as an example.