Question

Holloway Company earned $6,800 of service revenue on account during Year 1. The company collected $5,780 cash from accounts receivable during Year 1. Required Based on this information alone, determine the following for Holloway Company. (Hint: Record the events in general ledger accounts under an accounting equation before satisfying the requirements.) (Enter any decreases to account balances with a minus sign.) a. The balance of the accounts receivable that would be reported on the December 31, Year 1, balance sheet. b. The amount of net income that would be reported on the Year 1 income statement. c. The amount of net cash flow from operating activities that would be reported on the Year 1 statement of cash flows. d. The amount of retained earnings that would be reported on the Year 1 balance sheet.

Answer 1

• The balance of funds due to a company for goods or services supplied or employed but not yet paid for by customers is the account accounts receivable, that is the account.
• The net income is the amount that you get each month from your check instead of the gross amount paid before deductions for payrolls.
• Operating cash flows are a part of a corporate cash flow statement explaining the sources and use of cash from ongoing business activities over a certain period.
• Retained income (RE) is indeed the net income remaining to the company after it has paid dividends to its shareholders.

The further discussion can be defined as follows:

• For point A:

                  Calculated to use this formulation is the account receivable

                    reported on the balance sheets

        Using formula:

Admissible Accounts

• For point B:

                 The reported net income is revenue from services of $\ 18,000$

• For point C:

                 The reported net cash flow from operations is $\ 14,000$ in

                  cash from accounts receivables in 1 year.

• For point D:

                 Reclaimed revenues are $\ 18,000$ representing the amount of net

                  income transferred to the retained income account.

So, the final answer is "$4,000,  $18,000, $14,000, and $18,000".

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