Question

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 assets = liabilities + stockholders equity event cash + accounts receivable = + common stock + retained earnings earned revenue + + = + + + collected accounts receivable + + = + + + ending balance 0 + 0 = 0 + 0 + 0

Explanation:

Step1: Analyze earned revenue

When a company earns revenue, if it is a cash - based transaction, Cash (an asset) increases and Retained Earnings (part of Stockholders' Equity) increases. If it is a credit - based transaction, Accounts Receivable (an asset) increases and Retained Earnings (part of Stockholders' Equity) increases. So for "Earned revenue":
If cash is received: Cash +X, Accounts Receivable 0, Liabilities 0, Common Stock 0, Retained Earnings +X.
If on credit: Cash 0, Accounts Receivable +X, Liabilities 0, Common Stock 0, Retained Earnings +X.

Step2: Analyze collected accounts receivable

When accounts receivable are collected, Cash (an asset) increases and Accounts Receivable (an asset) decreases. Liabilities and Common Stock are not affected, and Retained Earnings is not affected by this collection transaction. So Cash +X, Accounts Receivable - X, Liabilities 0, Common Stock 0, Retained Earnings 0.

Step3: Calculate ending balances

The ending balance of Cash is the sum of the cash effects from earned revenue (if cash - based) and collection of accounts receivable. The ending balance of Accounts Receivable is the initial accounts - receivable balance (from earned revenue on credit) minus the amount collected. Liabilities ending balance remains 0 (assuming no liability - related transactions in this problem), Common Stock ending balance remains 0 (assuming no stock - related transactions in this problem), and Retained Earnings ending balance is the amount of revenue earned.

For "Earned revenue":

Event	Assets		=	Liabilities	+	Stockholders' Equity
Earned revenue (cash)	+X	0		0		0	+X
Earned revenue (credit)	0	+X		0		0	+X

For "Collected accounts receivable":

Event	Assets		=	Liabilities	+	Stockholders' Equity
Collected accounts receivable	+X	- X		0		0	0

For "Ending balance":

Event	Assets		=	Liabilities	+	Stockholders' Equity
Ending balance	Cash balance	Accounts - Receivable balance		0		0	Retained - Earnings balance

Answer:

For "Earned revenue":

Event	Assets		=	Liabilities	+	Stockholders' Equity
Earned revenue (cash)	+X	0		0		0	+X
Earned revenue (credit)	0	+X		0		0	+X

For "Collected accounts receivable":

Event	Assets		=	Liabilities	+	Stockholders' Equity
Collected accounts receivable	+X	- X		0		0	0

For "Ending balance":

Event	Assets		=	Liabilities	+	Stockholders' Equity
Ending balance	Sum of cash changes	Net accounts - receivable	0	0	0	Sum of revenue - related changes