Hernandez Company Began Business Operations and Experienced the Following Transactions

question 93

Essay

Hernandez Company began business operations and experienced the following transactions during the year beginning January 1, Year 1:Issued common stock for $50,000 cash.Provided services to customers for $125,000 on account.Purchased $2,500 of supplies on account.Paid $30,000 cash to rent office space for a 12-month period beginning July 1, Year 1.Collected $115,000 cash from customers.Paid cash for $90,000 of operating expenses.Adjusted the accounting records to reflect that there was $750 of supplies remaining on hand at year-end.Recorded an end-of-year adjustment to recognize rent expense.Required:Record the above transactions on a horizontal statements model, reflecting their effect on the different financial statements.Prepare Hernandez Company's income statement, balance sheet and statement of cash flows for the year ended December 31, Year 1.

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Definitions:

Quasi-Experiment

A research design that resembles experimental research but lacks random assignment to treatment or control groups, making causal inferences more challenging.

Naturally Occurring Groups

Groups that form spontaneously based on shared interests, geographies, or inherent traits, as opposed to being artificially assembled.

Dependent Variable

The variable in a study or experiment that is expected to change or vary as a result of manipulations of the independent variable(s).

Internal Validity

The judgment that for a particular experiment, it is possible to conclude that the manipulated independent variable caused the change in the measured dependent variable.