Metric analysis of transactions James Nesbitt established Up-Date Computer Servi
ID: 2509614 • Letter: M
Question
Metric analysis of transactions
James Nesbitt established Up-Date Computer Services on August 1, 20Y4. The effect of each transaction and the balances after each transaction for August are shown below in the integrated financial statement framework.
Indicate the effects of each transaction on the liquidity metric Cash and profitability metric Net Income – Cash Basis. If a transaction is not affected, select "No effect" and enter 0 in the amount box. If the effect on a transaction is negative, i.e, a decrease, be sure to enter the answer with a minus sign.
Statement of Cash Flows Balance Sheet Assets = Liabilities + Stockholders' Equity Cash + Land = Notes Payable + Common Stock + Retained Earnings a. Issued common stock 25,000 25,000 b. Fees earned 27,000 27,000 Balances 52,000 25,000 27,000 c. Rent expense (2,500) (2,500) Balances 49,500 25,000 24,500 d. Issued notes payable 10,000 10,000 Balances 59,500 10,000 25,000 24,500 e. Purchased land (40,000) 40,000 Balances 19,500 40,000 10,000 25,000 24,500 f. Paid expenses (1,900) (1,900) Balances 17,600 40,000 10,000 25,000 22,600 g. Paid salary expense (4,600) (4,600) Balances 13,000 40,000 10,000 25,000 18,000 h. Paid dividends (3,000) (3,000) Balances, Aug. 31 10,000 40,000 10,000 25,000 15,000 Statement of Cash Flows Income Statement a. Financing 25,000 b. Fees earned 27,000 b. Operating 27,000 c. Rent expense (2,500) c. Operating (2,500) f. Auto expense (1,200) d. Financing 10,000 f. Misc. expense (700) e. Investing (40,000) g. Salary expense (4,600) f. Operating (1,900) Net income 18,000 g. Operating (4,600) h. Financing (3,000) Increase in cash 10,000 Statoment of Cash Flows 25,000 27,000 (2.500) 10,000 (40,000) 27,000 (2,500) c.200) (703) (4,600) Finandng c. Rest d. Flnancing 9. Salary experse (4.600) ca.000) 10,000 Indicats the effects of each transaction an the liquidity netric Cash and proftability netric Nert leconne-Cash Basts. If a transactian is not afflected, select "No effect" and enter 0 in the amount bax. If the effect on a transaction is negative, Le, a decreane, be sure to enter the arswer with a mirus sign. Transaction Metrk Effects Liquidity Profit ability Net Income-c a. lsssed stoo b. Earned fees d. Issued rote payable E Paid expenses Paid salaries h. Paid dividendsExplanation / Answer
Sl.No. Trasaction Liquidity Cash Profitability Net Income Cash Basis a Issue of common stock 25000 No Effect b Earned Fees 27000 Increase 27000 c Paid Rent -2500 Decrease -2500 d Ised Note Payable 10000 No Effect e Purchased Land -40000 No Effect f Paid Expenses -1900 Decrease -1900 g Paid Salaries -4600 Decrease -4600 h Paid Dividends -3000 No Effect Total 10000 18000