Reference no: EM132992396

Question 1: Explain how each of the following events or series of events and the related adjusting entry will affect the amount of net income and the amount of cash flow from operating activities reported on the year-end financial statements. Identify the direction of change (increase, decrease, or NA) and the amount of the change. Organize your answers according to the following table. The first event is recorded as an example. If an event does not have a related adjusting entry, record only the effects of the event. (Not all cells require entry. Do not round intermediate calculations and round your final answers to nearest whole dollar amount.)

1. Paid $2,900 cash on October 1 to purchase a one-year insurance policy.
2. Purchased $1,450 of supplies on account. Paid $800 cash on accounts payable. The ending balance in the Supplies account, after adjustment, was $350.
3. Provided services for $7,400 cash.
4. Collected $10,900 in advance for services to be performed in the future. The contract called for services to start on May 1 and to continue for one year.
5. Accrued salaries amounting to $3,800.
6. Sold land that cost $18,600 for $18,600 cash.
7. Acquired $49,000 cash from the issue of common stock.
8. Earned $10,300 of revenue on account. Collected $9,270 cash from accounts receivable.
9. Paid cash operating expenses of $1,200.