Rice Company performed services on account for $30,000 in 2013, its first year of operations. Rice collected $24,000 cash from accounts receivable during 2013 and the remaining $6,000 in cash during 2014.
Required
a. Record the 2013 transactions in T-accounts.
b. Record the 2013 transactions in a horizontal statements model like the following one:
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c. Determine the amount of revenue Rice would report on the 2013 income statement.
d. Determine the amount of cash flow from operating activities Rice would report on the 2013 statement of cash flows.
e. Open a T-account for Retained Earnings, and close the 2013 Service Revenue account to the Retained Earnings account.
f. Record the 2014 cash collection in the appropriate T-accounts.
g. Record the 2014 transaction in a horizontal statements model like the one shown in Requirement b.
h. Assuming no other transactions occur in 2014, determine the amount of net income and the net cash flow from operating activities for 2014.