The Following Events Occurred During a Company's First Year of Operations

question 30

Essay

The following events occurred during a company's first year of operations, which ended on December 31:a)On April 1, paid $36,000 for to lease office space for one year beginning immediately.b)On February 1, paid $3,000 to purchase supplies; a physical count revealed $1,080 of supplies on hand on December 31.c)On September 1, received $48,000 cash in advance for services to be performed over a six-month period beginning immediately.Required:For each event:1)Show how the events affect each of the company's accounts using the horizontal statements model. In the last column, enter OA, IA, or FA for the type of cash flow activity, if applicable.2)In the row that follows, show how the corresponding adjustment, required as of December 31, affects each of the company's accounts.

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Definitions:

Breadth

A market indicator used in technical analysis that helps determine the breadth of market participation in a price move.

Support Level

A concept in technical analysis indicating a price level below which a security or stock seldom falls.

Stock Price

The price at which a particular stock is currently trading on the market.

Confidence Index

An indicator designed to measure confidence or sentiment among investors or consumers, often through surveys or economic indicators.