Hernandez Company Began Business Operations and Experienced the Following Transactions

question 35

Essay

Hernandez Company began business operations and experienced the following transactions during 2016:
1)Issued common stock for $50,000 cash.
2)Provided services to customers for $125,000 on account.
3)Purchased $2,500 of supplies on account.
4)Paid $30,000 cash to rent office space for a 12-month period beginning July 1.
5)Collected $115,000 cash from customers.
6)Paid cash for $90,000 of operating expenses.
7)Adjusted the accounting records to reflect that there was $750 of supplies remaining on hand at year-end.
8)Recorded an end-of-year adjustment to recognize rent expense.
Required:
a)Record the above transactions on a horizontal statements model,reflecting their effect on the different financial statements.Precede the amount with a minus sign if the transaction reduces that section of the equation.Precede a cash outflow amount with a minus sign.Enter 0 for items not affected.
b)Prepare Hernandez Company's income statement,balance sheet and statement of cash flows for the year ended December 31,2016.

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Definitions:

Marginal Means

The average values of variables calculated at each level of another variable, often used in the analysis of variance.

Significant Main Effect

A statistically significant result in an ANOVA test, indicating a difference in group means across one independent variable.

Crime Area

An identified section or zone within a geographic location known to have higher rates of criminal activities or incidents.

Marginal Means

The average value of a variable across different levels of another variable, often used in the context of factorial designs or ANOVA.