All one homework question, please help The Containers inc. experienced the follo
ID: 2328751 • Letter: A
Question
All one homework question, please help
The Containers inc. experienced the following events during its first year of operations, Year t 1. Acquired $42,000 cash by issuing common stock. 2. Earned $25.000 revenue on account 3. Paid $18.000 cash for operating expenses. 4. Borrowed $10,000 cash from a bank 5. Col 6. Paid a $1,000 cash dividend llected $22.000 of the balance in accounts receivable Required Show the effects of the events on the financial statements using a horizontal financial statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is recorded as an example. a. Would the accounts receivable account appear in the assets, liabilities, or stockholders' equity section of the December 31, Year 1 sheet? b. Determine the balance of the accounts receivable account that would appear on the December 31, Year 1, balance sheet. c. Determine the amount of net income that would appear in the Year 1 income statement. d. Detentne the amount of the cash now from operating activities that would appear in the Year statement of cash flowsExplanation / Answer
The Containers Inc. Horizontal Statements model for year 1 Balance Sheet Income statement Statement of Cash flows Event Assets = Liabilities + Stock holders equity Revenue - expense = net income cash + Accounts receivable = notes payable + Common stock + Retained earnings - 1 42000 0 0 42000 0 0 - 0 0 42000 Financing activity 2 25000 25000 - 0 25000 3 -18000 0 - 18000 -18000 10000 operating activity 4 10000 10000 0 - 0 0 10000 Financing activity 5 22000 -22000 0 - 3000 22000 operating activity 6 -1000 6000 0 - 0 0 1000 Financing activity - 55000 3000 10000 42000 6000 25000 - 21000 7000 Required A Accounts receivable will appear on the assets side of the balance sheet date as on Dec 31 at $ 3000 Required B Accounts receivable $3,000 Required C net income $7,000 Required D net cash flow from operating activities 12000