PS1 Problem XXXXXXXXXXpoints C. Loew Inc. experienced the following events during its first year of Operations. 1 Acquired cash by issuing common stock 2 Signed contract to provide services in the...

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PS1
Problem XXXXXXXXXXpoints
C. Loew Inc. experienced the following events during its first year of Operations.
1 Acquired cash by issuing common stock
2 Signed contract to provide services in the future
3 Bo
owed cash from a bank
4 Paid cash for Operating Expenses
5 Paid a cash dividend to stockholders
6 Purchased land with cash
7 Determined that the market value of the land is higher than the historical cost
a. Indicate whether each event is an asset source, asset use or asset exchange
. Use the horizontal statements model to show how each event affects the Balance Sheet,
Income Statement and statement of Cash Flows. Indicate the direction of the impact by
using I for increase, D for decrease or NA for no impact for 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. Hint : there will be a lot of NA's. Please input them.
Problem XXXXXXXXXXpoints
Breeze Inc was started on January 1, 2020, and experienced the following events during its
first year of operation.
1. Bo
owed $240,000 cash from National Bank.
2. Acquired $180,000 cash from the issue of common stock.
3. Earned $288,000 of cash revenues for performing services.
4. Paid 270,000$ of cash expenses.
5 Paid $60,000 cash to reduce the principal balance of the bank note payable
6 Acquired an additional $120,000 cash from the issue of common stock.
7 Paid $318,000 cash to purchase land.
8 Paid a $6,000 cash dividend to the stockholders.
9 Determined that the market value of the land is $450,000
REQUIRED
Record the preceding transactions in the horizontal statements model. Also, in the Cash
Flows column, classify the cash flows as operating activities (OA), investing activities (IA),
or financing activities (FA). See "Horizontal Statements Model" file on Canvas for guidance
Problem XXXXXXXXXXpoints
1 In 2021, Second Helping Co. acquired $330,000 cash from the issue of common stock.
2 The Company invested $258,000 cash in the purchase of land.
3 The Company billed $420,000 to its customers for services performed.
4 The Company collected $162,000 of the amount billed.
5 The Company incu
ed $96,000 of operating expenses on account.
6 The Company paid $60,000 of the accounts payable.
REQUIRED
Use the preceding information to answer the following questions. (Hint:Identify the six events
described in the paragraph and record them in a horizontal statements model before attempting
to answer the questions.)
a. What is the net income for the period?
. What amount of revenue will Second Helping Co. report on the 2021 income statement?
c. What amount of cash flow from revenue will Second Helping Co. report on the statement of cash flows?
d. What is the net cash flow from operating activities for the period?
e. What is the difference between net income and net cash flow from operating activities for the period?
f. What is the amount of net cash flow from financing activities?
g. What is the amount of net cash flow from investing activities?
h. What amounts of total assets, liabilities, and equity will Second Helping Co. report on the year-end balance sheet?
Problem XXXXXXXXXXpoints
Sweet Home Inc started their Service Business in 2021 and had the following transactions
1 The Business Acquired $210,000 cash from the issue of common stock.
2 The Business Provided services for $48,000 cash. This means the client paid when the services were rendered
3 The Business Provided $132,000 of services on account.
4 The Business Incu
ed $16,800 of other operating expenses on account.
5 The Business Paid $72,000 cash for salaries expense.
3/28/20228:28 PM
6 The Business Collected $42,000 cash from the account receivable created in Event 3.
7 The Business Paid $10,800 cash to purchase supplies. Treat this transaction as Operating Expenses paid.
8 The Business Received $26,400 cash in advance for services to be performed in the future.
9 The Business Collected $84,000 cash from the account receivable created in Event 3.
10 The Business Performed 60.0% of the services agreed to in Event 8.
REQUIRED
Record the preceding transactions in the horizontal statements model. Also, in the Cash
Flows column, classify the cash flows as operating activities (OA), investing activities (IA),
or financing activities (FA). See "Horizontal Statements Model" file on Canvas for guidance.
Problem XXXXXXXXXXpoints
The following information is available for two different types of businesses for the 2020
accounting period. No Question CPAs is a service business that provides accounting services to
small businesses. Alabama is a merchandising business that sells sports clothing, trophies and medals
to college students.
Data for Alabama
1. Bo
owed $300,000 from the bank to start the business.
2. Purchased $192,000 inventory for cash.
3. Inventory costing $110,400 was sold for $180,000 cash.
4. Paid $25,200 cash for operating expenses.
Data for No Question CPAs
1. Bo
owed $300,000 from the bank to start the business.
2. Provided $210,000 of services to customers and collected $210,000 cash.
3. Paid salary expense of $150,000
REQUIRED
a. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the
companies. This is different than completing a horizontal model. A horizontal model can help organize the transactions.
. Why does the CPA firm not compute gross margin on its income statement?
c. Which of the two businesses would have product costs or cost of goods? Why?
d. Compare the assets of both companies. What assets do they have in common? What assets
are different? Why?
Problem XXXXXXXXXXpoints
On January 1, 2021, MCA started a business
The company had the following accounting events during the first year of operation.
1. Started the business by issuing common stock for $300,000 cash.
2. Paid $237,000 cash to purchase inventory.
3 Sold merchandise that cost $120,000 for $270,000 on account.
4 Paid $60,000 for operating expenses.
5 Wrote off $18,000 of inventory
6 Collected $240,000 cash from accounts receivable.
REQUIRED
1. Record the preceding transactions in the horizontal statements model.
2. Prepare an income statement, a balance sheet, and a statement of cash flows.
3. Since MCA sold inventory for 270,000$ XXXXXXXXXXhe will be able to recover more than 20% of the
300,000$ XXXXXXXXXXhe invested in the stock. Do you agree with this statement? Why or why not?
Hint : Think Net Income generated by business activity in the period compared to the original investment
Problem 4-1 - extra credit 5 points
As of Fe
uary 28, 2022 the bank statement showed an ending balance of 156,600.00$
The unadjusted cash account balance on the books was 164,100.00$
The following reconciling information is available.
1 Deposit in Transit not processed by bank 41,886.00$
2 Credit memo in bank statement for interest earned by company 216.00$
3 Outstanding Check not processed by bank 34,320.00$
4 Debit memo for service charge processed by bank 150.00$
Adjusted Balance
Please reconcile the bank account by comparing the bank statement balance to the cash balance on the books.
3/28/20228:28 PM

Answered 4 days AfterApr 08, 2022

Solution

Nitish Lath answered on Apr 12 2022
8 Votes
Problem 1-1
                    Its ok to replace/change names of accounts depending on the requirements of a given problem. Please don’t add or subtract columns
                    NOTE : students will never need to replace/change names of columns C and S through AD
    SPRING 2022
            BALANCE SHEET                                                                                INCOME STATEMENT                        STATEMENT OF CASH FLOWS
            ASSETS                        LIABILITIES                                        STOCKHOLDERS' EQUITY                REVENUE    -    EXPENSE    =    NET INCOME        CASH FLOW    CASH FLOW type
    Acct Event                                        Sales Tax Payable        Wa
anty Payable        Interest Payable        Notes        Common Stock        Retained
     No.        Cash    +    Accts Receivable    +    Land    =    Accts Payable    +                        +    Payable    +        +    Earnings
    1        I                                                                I                                        I    FA
    2        NA                                                                NA                                        NA
    3        I                                                        I                                                I    FA
    4        D                                                                        D                I        D        D    OA
    5        D                                                                        D                                D    FA
    6        D                I                                                                                        D    IA
    7        NA
    8
    9
    10
    Total        -          -          -          -          -          -          -          -          -          -          -          -          -          -
    Solution 1-1
    1. Acquired cash by issuing common stock is                                Asset source
    2. Signed contract to provide services in the future is                                 NA
    3. Bo
owed cash from a bank is                                 Asset source
    4. Paid cash for Operating Expenses is                                 Asset use
    5. Paid a cash dividend to stockholders is                                 Asset use
    6. Purchased land with cash is                                 Asset exchange
    7. Determined that the market value of the land is higher than the historical cost is                                 NA
Problem 1-2
                    Its ok to replace/change names of accounts depending on the requirements of a given problem. Please don’t add or subtract columns
                    NOTE : students will never need to replace/change names of columns C and S through AD
    SPRING 2022
            BALANCE SHEET                                                                                INCOME STATEMENT                        STATEMENT OF CASH FLOWS
            ASSETS                        LIABILITIES                                        STOCKHOLDERS' EQUITY                REVENUE    -    EXPENSE    =    NET INCOME        CASH FLOW    CASH FLOW type
    Acct Event                                        Sales Tax Payable        Wa
anty Payable        Interest Payable        Note        Common Stock        Retained
     No.        Cash    +    Accts Receivable    +    Land    =    Accts Payable    +                        +    Payable    +        +    Earnings
    1        240000                                                        240000                                                240000    FA
    2        180000                                                                180000                                        180000    FA
    3        288000                                                                        288000        288000                288000        288000    OA
    4        -270000                                                                        -270000                -270000        -270000        -270000    OA
    5        -60000                                                        -60000                                                -60000    FA
    6        120000                                                                120000                                        120000    FA
    7        -318000                318000                                                                                        -318000    IA
    8
    9
    10
    Total        180000         -         318000         -          -          -          -         180000        300000        18000        288000        -270000        18000        180000
Problem 2-1
                    Its ok to replace/change names of accounts depending on the requirements of a given problem. Please don’t add or subtract columns
                    NOTE : students will never need to replace/change names of columns C and S through AD
    SPRING 2022
            BALANCE...
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