The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,130. During this period, a customer returned a product that cost $848 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model. (Use a + to indicate increase or a - for decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Columns for events that have no effect on any of the elements should be left blank.) Note: Not all cells will require an input. CHAIR COMPANY Horizontal Statements Model Event Assets Balance Sheet =Liabilities + Income Statement Statement of Stockholder's Equity - Revenue Expense Net Income Cash Flows Estimates + Paid +

The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,130. During this period, a customer returned a product that cost $848 to repair. Required a. Show the effects of these transactions on the financial statements using a horizontal statements model. (Use a + to indicate increase or a - for decrease. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Columns for events that have no effect on any of the elements should be left blank.) Note: Not all cells will require an input. CHAIR COMPANY Horizontal Statements Model Event Assets Balance Sheet =Liabilities + Income Statement Statement of Stockholder's Equity - Revenue Expense Net Income Cash Flows Estimates + Paid +

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Suppose your company sells goods for $300, of which $200 is received in cash and $100 is onaccount. The goods cost your company $125 and were paid for in a previous period. Your companyalso recorded salaries and wages of $70, of which only $30 has been paid in cash.Required:1. Show the journal entries to record these transactions.2. Calculate the amount that should be reported as net cash flow from operating activities.3. Calculate the amount that should be reported as net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?
The Chair Company provides a 120-day parts-and-labor warranty on all merchandise it sells. The Chair Company estimates the warranty expense for the current period to be $1,270. During this period, a customer returned a product that cost $953 to repair. a. Show the effects of these transactions on the financial statements using a horizontal statements model. Use "+" for increase, "-" for decrease, and NA for not affected. In the Cash Flow column, indicate whether the item is an operating activity, investing activity, or financing activity. b. Prepapre the journal entries to record the warranty expense for the period and payment for the actual repair costs.
In its income statement for the year ended December 31, 2020, Angel Company reported revenue of P5,000,000. The accounts receivable at January 1 is P300,000; Uncollectible accounts written off is P20,000; and accounts receivable at December 31 is P200,000. How much revenue will be reported under the cash basis of accounting? *A. P4,900,000B. P4,920,000C. P5,080,000D. P5,100,000E. answer not given
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