The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $72,000 of services for clients on account. 2. Performed $44,000 of services for cash. 3. Incurred $36,000 of other operating expenses on account. 4. Paid $17,000 cash to an employee for salary. 5. Collected $60,000 cash from accounts receivable. 6. Paid $19,000 cash on accounts payable. 7. Paid an $6,000 cash dividend to the stockholders. 8. Accrued salaries were $2,800 at the end of Year 1. Required

a. Show the effects of the events on the financial statements using a horizontal statements model.

b. What is the amount of total assets at the end of 2016?

c. What is the balance of accounts receivable at the end of 2016?

d. What is the balance of accounts payable at the end of 2016?

Question

Jayda Sampson

Business

4 August, 15:55

The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $72,000 of services for clients on account. 2. Performed $44,000 of services for cash. 3. Incurred $36,000 of other operating expenses on account. 4. Paid $17,000 cash to an employee for salary. 5. Collected $60,000 cash from accounts receivable. 6. Paid $19,000 cash on accounts payable. 7. Paid an $6,000 cash dividend to the stockholders. 8. Accrued salaries were $2,800 at the end of Year 1. Required

a. Show the effects of the events on the financial statements using a horizontal statements model.

b. What is the amount of total assets at the end of 2016?

c. What is the balance of accounts receivable at the end of 2016?

d. What is the balance of accounts payable at the end of 2016?

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Answers (1)

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Kayla Fitzpatrick · Answer 1

Total Asset = $74000

Account receivable balance = $12,000

Account payable balance = $ 17,000

Salary Payable - $2800

Explanation

Payable

Cash Receivable Payable Salary Equity Rev Expense

1 72000 72000 72000

2 44000 44000 44000

3 36,000 (36,000) 36,000

4 (17,000) (17,000) 17,000

5 60,000 (60,000)

6 (19,000) (19,000)

7 (6000) (6000)

8. (2800) (2800) (2800)

Total 62,000 12,000 17,000 2800 54,200 28000 50200

Total Asset = 74,000

Account receivable balance = 12000

Account payable balance = 17,000