Question

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?

Answer 1

Answer:

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