Question

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.) 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. complete this question by entering your answers in the tabs below. accounting equation req a to d 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.) note: not all cells require input. enter any decreases to account balances with a minus sign. holloway company effect of events on the year 1 accounting equation event assets = liabilities + stockholders equity cash + accounts receivable = + common stock + retained earnings earned revenue collected accounts receivable ending balance 0 + 0 = 0 + 0 + 0

Explanation:

Step1: Define accounting - equation basics

Assets = Liabilities+Stockholders' Equity. Accounts receivable is an asset, net - income affects retained earnings, and cash - flow from operating activities is related to cash transactions.

Step2: Analyze accounts receivable balance

When revenue is earned on account, accounts receivable increases. When cash is collected from accounts receivable, accounts receivable decreases. Without specific amounts of revenue earned on account and cash collected, we assume the following general logic. Let's say revenue earned on account is $R$ and cash collected is $C$. The ending accounts - receivable balance $AR = R - C$.

Step3: Determine net income

Net income is calculated as revenues minus expenses. Since no expenses are given and only revenue is mentioned, if the revenue earned is $R$, and assuming no expenses, net income $NI=R$.

Step4: Calculate net cash - flow from operating activities

Cash collected from accounts receivable is part of operating cash - flow. If cash collected from accounts receivable is $C$, and no other operating cash transactions are mentioned, the net cash - flow from operating activities $CFO = C$.

Step5: Calculate retained earnings

Retained earnings increase by the amount of net income (assuming no dividends are paid). So, if net income is $NI$, the retained - earnings balance $RE = NI$.

However, since no specific numerical values are provided in the question:

Answer:

a. The balance of accounts receivable depends on the amount of revenue earned on account and cash collected from accounts receivable.
b. Net income is equal to the revenue earned (assuming no expenses).
c. Net cash - flow from operating activities is equal to the cash collected from accounts receivable (assuming no other operating cash transactions).
d. Retained earnings is equal to the net income (assuming no dividends are paid).