Hart, Attorney at Law, experienced the following transactions in Year the first year of operations:
Accepted $ on April Year as a retainer for services to be performed evenly over the next months.
Performed legal services for cash of $
Purchased $ of office supplies on account.
Paid $ of the amount due on accounts payable.
Paid a cash dividend to the stockholders of $
Paid cash for operating expenses of $
Determined that at the end of the accounting period $ of office supplies remained on hand.
On December Year recognized the revenue that had been earned for services performed in accordance with Transaction
Required:
Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify the cash flows as operating activities OA investing activities IA or financing activities FA The first event has been recorded as an example.
