Question

Required information

[The following information applies to the questions displayed below.]

Sye Chase started and operated a small family architectural firm in Year 1. The firm was affected by two events: (1) Chase provided $21,400 of services on account, and (2) he purchased $4,600 of supplies on account. There were $1,050 of supplies on hand as of December 31, Year 1.

c. Show the above transactions in a horizontal statements model. (Enter any decreases to account balances and cash outflows with a minus sign. In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and NC for net change in cash and select "NA" wherever required.)

	CHASE ARCHITECTURAL SERVICES Effect of Transactions on the Financial Statements for Year 1 No. Assets = Liabilities + Stockholders' Equity Revenue – Expense = Net Income Statement of Cash Flows Accounts Receivable + Supplies = Accounts Payable + Common Stock + Retained Earnings a1. + = + + – = a2. + = + + – = b. + = + + – = Bal. 0 + 0 = 0 + 0 + 0 0 – 0 = 0

Answer 1

Answer

--Requirement as asked

CHASE ARCHITECTURAL SERVICES

Effect of Transactions on the Financial Statements for Year 1

No.

Assets

=

Liabilities

+

Stockholders' Equity

Revenue

–

Expense

=

Net Income

Statement of Cash Flows

Accounts Receivable

+

Supplies

=

Accounts Payable

+

Common Stock

+

Retained Earnings

a1.

$21,400

+

=

+

+

$21,400

$21,400

–

=

$21,400

NA

a2.

+

$4,600

=

$4,600

+

+

–

=

NA

b.

+

($3,550) [=4600 - 1050]

=

+

+

($3,550)

–

$3,550

=

($3,550)

NA

Bal.

$21,400

+

$1,050

=

$4,600

+

$0

+

$17,850

$21,400

–

$3,550

=

$17,850