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Exercise 2-1A Effect of collecting accounts receivable on the accounting equation and financial statements LO 2-1, 2-3 Holloway Company eamed $4,900 of service revenue on account during Year 1. The company collected $4,165 cash from accounts receivable during Year 1. Required Based on this information alone, determine the following for Holloway Company. (Hint: Record the events in general ledger accounts under an accounting equation before satisfying the requirements.) (Enter any decreases to account balances with a minus sign.) a. The balance of the accounts receivable that would be reported on the December 31, Year 1, balance sheet. b. The amount of net income that would be reported on the Year 1 income statement c. The amount of net cash flow from operating activities that would be reported on the Year 1 statement of cash flows. d. The amount of retained earnings that would be reported on the Year 1 balance sheet. Exercise 2-4A Effect of accounts receivable and accounts payable transactions on financial statements LO 2-1, 2-2, 2-3 The following events apply to Lewis and Harper, a public accounting firm, for the Year 1 accounting period: 1. Performed $79.500 of services for clients on account. 2. Performed $47.000 of services for cash. 3. Incurred $42,000 of other operating expenses on account. 4. Paid $18,500 cash to an employee for salary. 5. Collected $60,000 cash from accounts receivable. 6. Paid $24,000 cash on accounts payable. 7. Paid a $6,000 cash dividend to the stockholders. 8. Accrued salaries were $3,400 at the end of Year 1. Required a. Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for invdstment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. The first event is shown as an example. (Enter any decreases to account balances and cash outflows with a minus sign.) b. What is the amount of total assets at the end of Year 1? c. What is the balance of accounts receivable at the end of Year 1? d. What is the balance of accounts payable at the end of Year 1? f. What is net income for Year 1? What is the amount of net cash flow from operating activities for Year 12

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