Ultra Day Spa provided $91,050 of services during 2016. All customers paid for t

Question

Ultra Day Spa provided $91,050 of services during 2016. All customers paid for the services with credit cards. Ultra submitted 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 1.50 percent service charge Required Record the credit card sales (Event 1) and the subsequent collection of accounts receivable (Event 2) in a horizontal statements model like the one shown here. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element is not affected by the event. (Enter any decreases to account balances with a minus sign. Round your answers to nearest whole dollar.) Balance Sheet Assets Liab Liab + Acct. Rec. ULTRA DAY SPA Horizontal Statements Model Income Statement E Equity quity Ret. Ear. Revenue - Expense = Net Income Event Cash Cash Flows AAAAAA b-1. What is the amount of total assets at the end of the accounting period? (Round your answer to nearest whole dollar.) Total assets

Explanation / Answer

Answers

= $ 91,050 – (91050 x 1.5%)
= 91050 – 1365.75
= $ 89,684.25
= $ 89,684

Event

Cash

Accounts receivables

Liabilities

Equity /Retained Earnings

Rev

Expense

Net Income

Cash Flows

1

$                       -  

$       91,050.00

$                               -  

$                91,050.00

$          91,050.00

$                            -  

$    91,050.00

$                           -  

2

$        89,684.00

$     (91,050.00)

$                               -  

$                (1,366.00)

$                         -  

$               1,366.00

$    (1,366.00)

$            89,684.00 (Operating Activities)

----Answer b1: Total Assets = Cash + Accounts receivables = 89684 + 0 = $ 89,684

---Answer b2: Revenue to be reported = $ 91,050

---Answer b3: Amount of cash flow from Operating activities = $ 89,684

Event

Cash

Accounts receivables

Liabilities

Equity /Retained Earnings

Rev

Expense

Net Income

Cash Flows

1

$                       -  

$       91,050.00

$                               -  

$                91,050.00

$          91,050.00

$                            -  

$    91,050.00

$                           -  

2

$        89,684.00

$     (91,050.00)

$                               -  

$                (1,366.00)

$                         -  

$               1,366.00

$    (1,366.00)

$            89,684.00 (Operating Activities)

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