Module 5 Homework Continued Use complete sent ences. Show and label all work to

Question

Module 5 Homework Continued Use complete sent ences. Show and label all work to receive any credit for the homework 12. Financial Statement Effects: For each of the accounting events shown below, indicate in the vided the appropriate number of the financial statement(s) the event would affect (not where is appears, but what it would affect!). 1. Income Statement 2. Statement of Owner's Equity 3. Balance Sheet 4. Statement of Cash Flows a. $500 worth of services are performed for and billed on account. The electric bill for $250 is received and paid. c. A machine worth $5,000 is acquired on open account. d. An advertisement worth $50 is run in the local newspaper. We are billed for -b. the ad, due next month. e. The owners invested $5,000 cash in the business. f. Employees work earning $6,000, but are not yet paid. g. Paid $600 cash for supplies. h. Paid $500 cash to supplier to settle Accounts Payable. i. Received $300 cash on account from a customer. j. Property taxes of $500 are due but will not be paid until the end of the month. k. Supplies worth $400 are used.

Explanation / Answer

Solution:

Transaction that will affect number of financial statements and description of financial statements affected:

a. 2 statement = Income Statement and balance sheet

b. 3 statement = Income Statement, balance sheet and cash flow statement

c. 1 statement = Balance Sheet

d. 2 statement = Income Statement and balance sheet

e. 3 Statement = Statement of Owner's Equity, Balance Sheet and Cash flow statement

f. 2 statement = Income Statement and balance sheet

g. 2 statement = Balance sheet and cash flow statement

h. 2 statement = Balance sheet and cash flow statement

i. 2 statement = Balance sheet and cash flow statement

j. 2 statement = Income Statement and balance sheet

k. 2 statement = Income Statement and balance sheet

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