Ross, Attorney at Law, experienced the following transactions in 2014, the first
ID: 2570322 • Letter: R
Question
Ross, Attorney at Law, experienced the following transactions in 2014, the first year of operations Purchased $1,200 of office supplies on account Accepted $17,000 on February 1, 2014, as a retainer for services to be performed evenly over the next 12 months Performed legal services for cash of $62,500 4 Paid cash for salaries expense of $19,900 s.Paid a cash dividend to the stockholders of $5,900 6 Paid $1,080 of the amount due on accounts payable Determined that at the end of the accounting period, $135 of office supplies remained on hand. BOn December 31, 2014, recognized the revenue that had been earned for services performed in accordance with Transaction 2 Required Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. The first event has been recorded as an example. (Do not round intermediate calculations and round your final answers to nearest whole number. Enter any decreases to account balances and cash outflows with a minus sign.) Effect of Transactions on the Financial Statements for 2014 Stockholders" Equity Assets Income Statement Retained Revenue Statement of Cash Flow Cash Supplies Expense = Net Income 1, 200 200 3. 5. TotalsExplanation / Answer
17,000 x 11/12 = 15,583.33
Transaction Assets = Liabilities + Stockholders equity Income Statement Statement of cash flow Cash + Supplies = Accounts payable + Unearned revenue + Retained earnings Revenue - Expense = Net Income 1) NA + 1,200 = 1,200 + NA + NA NA - NA = NA NA 2) 17,000 + NA = NA + 17,000 + NA NA - NA = NA 17,000 OA 3) 62,500 + NA = NA + NA + 62,500 62,500 - NA = 62,500 62,500 OA 4) -19,900 + NA = NA + NA + -19,900 NA - 19,900 = -19,900 (19,900) OA 5) -5,900 + NA = NA + NA + -5,900 NA - NA = NA (5,900) FA 6) -1,080 + NA = -1080 + NA + NA NA - NA = NA (1,080) OA 7) NA + -1065 = NA + NA + -1065 NA - 1065 = -1065 NA 8) NA + NA = NA + -15583.33333 + 15583.33333 15583.33 - NA = 15583.3333 NA 52,620 135 120 1,417 51,218 78,083 20,965 57,118 52,620 NCRelated Questions
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