? D Not secure ezto mheducation.com/hm.tpx Exercise 7-13A Effect of credit card

Question

? D Not secure ezto mheducation.com/hm.tpx Exercise 7-13A Effect of credit card sales on financial statements LO 7-6 tra Day Spa provided $94 300 of services during 2016 All customers paid for the services with credit cards Ultra submited the credit card receipts to the credit card company immediately The credit card company paid Ultra cash in the amount of face value less a 150 percent service charge Record the credt card sales (Event 1) and the subsequent collection of accounts receivable (Event 2) (IA) or inancing activity (FA) Use NA to by the event (Enter any decreases to account balances Required in a horizontal statements model lke the one shown here. In the Cash Flow column indicate whether the hem is an operating aclivity (OA), investing ndicate that an element is not affected with a minus sign. Round your answers to nearest whole dollar) Horizontal Statements Model Balance Sheet Income Statement Assets Liab Equity Acct Flows b.1. Whut is the amount of total assets at the end of the accounting period? (Round your answer to nearest whole dollar.) b2 Whar is the amount of revenue reported on the income statement? (Roand your nswer to nearest whole dollar 3. What s the aount of cash ow from operating acthviies reported on the statement of cash tows? (Roand your anwer to nearest whole dollar.)

Explanation / Answer

Sloution: a) Ultra Day Spa Horizontal Statement Model Balance Sheet Income Statement Assets Equity Event Cash Account Receivable Liablility Retn. Earnings Revenue (Minus) Expenses Net Income Cash Flows 1 0 94300 0 94300 94300 0 94300 NA 2 92885.5 -94300 0 92885.5 0 1414.5 92885.5 OA b)1) The Total assets at the end of the accounting period is 92885.5 b-2) Amount of revenue reported in the income statement is 94300 b-3) Amount of Cash Flow form operating activities 92885.5

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