Ultra Day Spa provided $94,300 of services during 2016. All customers paid for t
ID: 2581890 • Letter: U
Question
Ultra Day Spa provided $94,300 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 1.80 percent service charge.
a.
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.)
What is the amount of total assets at the end of the accounting period? (Round your answer to nearest whole dollar.)
What is the amount of revenue reported on the income statement? (Round your answer to nearest whole dollar.)
What is the amount of cash flow from operating activities reported on the statement of
cash flows? (Round your answer to nearest whole dollar.)
Ultra Day Spa provided $94,300 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 1.80 percent service charge.
Explanation / Answer
a. Event 1 Accounts receivables-Credit Card Issuing Co. 94300 OA Sales 94300 OA Event 2 Cash 92603 OA Credit card expense 1697 OA Accounts receivables-Credit Card Issuing Co. 94300 OA b-1. Amount of total assets at the end of the accounting period Cash 92603 b-2. Amount of revenue reported on the income statement 94300-1697= 92603 b-3. Amount of cash flow from operating activities reported on the statement of cash flows Sales -Cost of services-Credit card expense 94300-1697= 92603
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