Show the effects of the above transactions in a horizontal statements model like

Question

Show the effects of the above transactions in a horizontal statements model like the one shown below. When you record amounts in the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA), or Net Cash (NC). The letters NA indicate that an element is not affected by the event. (Round your final answers to the nearest dollar amount. Negative amounts should be indicated with a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)

Explanation / Answer

Assets = Liab. + Equity / Rev. – Exp. = Net Inc. / Cashflow Cash+ Accts. – Allow Martin’s Appliance recognized $292,000 of service revenue on account Assets = Liab. + Equity $292,000 = NA + $292,000 During the first year of operation, 2012, Martin’s Appliance recognized $292,000 of service revenue on account Assets = Liab. + Equity $292,000 = NA + $292,000 Also Rev. – Exp. = Net Inc. $292,000 - NA = $292,000 A. What amount of cash was collected by Martin’s during 2012? Assets = Liab. + Equity $234,600 - $234,600 = NA + NA (both an increase in assets, and a decrease in assets) B. Assuming the use of an allowance system to account for uncollectible accounts, what amount should Martin record as uncollectible accounts expense in 2012? $57,400 x 4% = $2,296 Assets = Liab. + Equity - $2,296 = NA + - $2,296 Also Rev. – Exp. = Net Inc NA - $2,296 = -$2,296 As far as: Cash+ Accts. – Allow The various transactions affecting this one are: NA + $292,000 - NA $234,600 - $234,000 - NA NA + NA - $2,296

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