the instructions are in the attached file, and the answers should be completed in the Excel file attached
PS1 Problem 1-1 10 points 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 Borrowed 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 b. 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 1-2 10 points Breeze Inc was started on January 1, 2020, and experienced the following events during its first year of operation. 1. Borrowed $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 2-1 10 points 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 incurred $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? b. 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 2-2 15 points 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 Incurred $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 3-1 30 points 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. Borrowed $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. Borrowed $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. b. 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 3-2 25 points 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 $240,000 cash from accounts receivable. REQUIRED 1. Record the preceding transactions in the horizontal statements model. 2. Prepare an income statement, a balance sheet, and a statement of cash flows. 3. Since MCA sold inventory for 270,000$ he will be able to recover more than 20% of the 300,000$ he 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 February 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