problem. eC Secure | https//kennesaw.view.usg.edu/d2/le/1530098/discussions/thre

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problem. eC Secure | https//kennesaw.view.usg.edu/d2/le/1530098/discussions/threads/7050565/Nievw Part A Packard Consultants was started in 2018. During that year the company earned $5,000 of consulting revenue on account. Assume this is the only event experienced by Packard during 2018 Required 1. Record the event using the horizontal financial statements model: Assets Liabilities+Shareholders Equity (an excel spreadsheet) similar to demonstration problem 1 Prepare an income statement, a statement of retained earnings, a balance sheet, and a statement of cash flows for 2018. 2. Part B During 2019, Packard Consultants collected $5,000 cash from the account receivable it established in Pant Required 1. Record the event under using the horizontal financial statements model. Same as above part 1 2. Prepare an income statement, a statement of retained earnings, a balance sheet, and a statement of cash flows for 2019 See example below. Packard's customers created charge accounts and purchased goods or services by charging the purchases to their accounts. Revenue (recorded as shareholders equity-retained earnings) is recognized in the accounting period in which the services are provided regardless of when cash changes hands. In general, transactions in which a revenue or expense is recognized before cash changes hands are called accruals. Note when the cash is actually collected, the cash account is increased and the account receivable (on account) is decreased, now zero. After reviewing the below attempt to prepare the financial statement for this one transaction. Refer to the chapter I example. I will post the correct solutions ubsequentlv Type here to search

Explanation / Answer

Income statement Particulars Amount consulting revenue 5000 Total revenue 5000 Total expenses 0 net income 5000 Statement of retained earnings Particulars Amount Beginning balance                 -   Net income for the period          5,000 Less dividends paid                 -   Ending balance          5,000 Balance sheet Liabilities and stockholders equity Amount Assets Amount Liabilities Current assets Current liabilities Cash             5,000 Total current liabilities                    -   Total current assets             5,000 Stockholders equity retained earnings             5,000 Fixed assets Total stockholders equity             5,000 Total fixed assets                    -   Total liabilities and stockholders equity             5,000 Total assets             5,000 Cash flow statement Cash flow from operations Cash collected from customers 5000 Cash flow from operating activities 5000 Cash flow from financing activities 0 Cash flow from investing activities 0 Total change in cash flow 5000 Add opening cash balance 0 Closing cash balance 5000

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