On April 6, Home Furnishings purchased $32,000 of merchandise from Una's Imports, terms 3/10, n/45. On April 8, Home Furnishings returned $6,700 of the merchandise to Una's Imports for credit. Home Furnishings paid cash for the merchandise on April 15. Required a. What is the amount that Home Furnishings must pay Una's Imports on April 15? b. Record the events in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. c. How much must Home Furnishings pay for the merchandise purchased if the payment is not made until April 20? d. Record the payment of the merchandise in Requirement (c) in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank.

On April 6, Home Furnishings purchased $32,000 of merchandise from Una's Imports, terms 3/10, n/45. On April 8, Home Furnishings returned $6,700 of the merchandise to Una's Imports for credit. Home Furnishings paid cash for the merchandise on April 15. Required a. What is the amount that Home Furnishings must pay Una's Imports on April 15? b. Record the events in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. c. How much must Home Furnishings pay for the merchandise purchased if the payment is not made until April 20? d. Record the payment of the merchandise in Requirement (c) in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 38E: Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on...

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Analyzing the Accounts The controller for Summit Sales Inc. provides the following information on transactions that occurred during the year: a. Purchased supplies on credit, $18,600 b. Paid $14,800 cash toward the purchase in Transaction a c. Provided services to customers on credit1 $46,925 d. Collected $39,650 cash from accounts receivable e. Recorded depreciation expense, $8,175 f. Employee salaries accrued, $15,650 g. Paid $15,650 cash to employees for salaries earned h. Accrued interest expense on long-term debt, $1,950 i. Paid a total of $25,000 on long-term debt, which includes $1.950 interest from Transaction h j. Paid $2,220 cash for l years insurance coverage in advance k. Recognized insurance expense, $1,340, that was paid in a previous period l. Sold equipment with a book value of $7,500 for $7,500 cash m. Declared cash dividend, $12,000 n. Paid cash dividend declared in Transaction m o. Purchased new equipment for $28,300 cash. p. Issued common stock for $60,000 cash q. Used $10,700 of supplies to produce revenues Summit Sales uses the indirect method to prepare its statement of cash flows. Required: 1. Construct a table similar to the one shown at the top of the next page. Analyze each transaction and indicate its effect on the fundamental accounting equation. If the transaction increases a financial statement element, write the amount of the increase preceded by a plus sign (+) in the appropriate column. If the transaction decreases a financial statement element, write the amount of the decrease preceded by a minus sign (-) in the appropriate column. 2. Indicate whether each transaction results in a cash inflow or a cash outflow in the Effect on Cash Flows column. If the transaction has no effect on cash flow, then indicate this by placing none in the Effect on Cash Flows column. 3. For each transaction that affected cash flows, indicate whether the cash flow would be classified as a cash flow from operating activities, cash flow from investing activities, or cash flow from financing activities. If there is no effect on cash flows, indicate this as a non-cash activity.
On April 6, Year 1, Home Furnishings purchased $25,200 of merchandise from Una Imports, terms 2/10 n/45. On April 8, Home returned $2,400 of the merchandise to Una Imports for credit. Home paid cash for the merchandise on April 15, Year 1. Required a. What is the amount that Home Furnishings must pay Una Imports on April 15? b. Record the events in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. c. How much must Home Furnishings pay for the merchandise purchased if the payment is not made until April 20, Year 1? d. Record the payment of the merchandise in Requirement (c) in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the…
Assign on Apt 6, Home Furmtshings purchased $25,200 of mechandise from Una's Imports, terms 2/10, n/45. On April 8, Horne Furntshtngs ed $2,400 of the merchandise to Una's Imports for credit Home Fumishings pald cash for the merchandise on April 15. Required What ts the amount that Home Furnishings must pay Una's Imports on April 15? Record the events In a hortzontal statements model In the Cash Flow column, use OA to designate operating activity, IA for investing activity, FA for financing activity, or NC for net change In cash. If the element Is not affected by the event, leave the cell blank How much must Home Furnishings pay for the merchandise purchased if the payment Is not made until April 20? 1. Record the payment of the merchandise In Requirement (c) In a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for Investing activity, FA for financing activity, or NC for net change In cash If the element is not affected by the event,…
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