Royal carpet cleaning provided 90000 of services during

Reference no: EM13598282

Royal Carpet Cleaning provided $90,000 of services during 2011, its first year of operations. All customers paid for the services with major credit cards. Royal submitted the credit card receipts to the credit card company immediately. The credit card company paid Royal cash in the amount of face value less a 3 percent service charge.

Required

a. Record the credit card sales and the subsequent collection of accounts receivable in a horizontal statements model like the one shown here. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element is not affected by the event.

Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow

Cash + Accts. Rec.

QUESTIONS:

1. What is the amount of total assets at the end of the accounting period?

2. What is the amount of revenue reported on the income statement?

3. What is the amount of cash flow from operating activities reported on the statement of cash flows?

4. Why would Royal Carpen Cleaning accept credit cards instead of providing credit directly to its customers? In other words, why would Royal be willing to pay 3 percent of sales to have the credit card company handle its sales account?

Reference no: EM13598282

Questions Cloud

Lori luthen recently opened her own basketweaving studio : lori luthen recently opened her own basketweaving studio. she sells finished baskets in addition to the raw materials

The organization puts on three different fairs each year - : the organization puts on three different fairs each year - one in february one in june and one in november. the fair

John recently came into a sum of money from an inheritance : john recently came into a sum of money from an inheritance and is contemplating purchasing a small manufacturing

Cjs pizza purchased a delivery van on january 1 2011 for : events related to the acquisition use and disposal of a tangible plant asset straight-line depreciation.cjs pizza

Royal carpet cleaning provided 90000 of services during : royal carpet cleaning provided 90000 of services during 2011 its first year of operations. all customers paid for the

Imagine that this company came to you before undertaking : assume that a company buys land with a building on it for 1500000. at the time of purchase the company planned to tear

Solvgen inc an sec registrant is a pharmaceutical : direct drugs inc. direct is planning to acquire solvgen inc. solvgen or the company a publicly owned company during the

Prepare income statements including income tax expenses for : wedig diagnostics manufactures two lasers photometer that are used in preparing dnas. the us model is designed for use

Lake company received proceeds of 188500 on 10-year 8 bonds : lake company received proceeds of 188500 on 10-year 8 bonds issued on january 1 2011. the bonds had a face value of

User Account

All Pages