Ben Parker started and operated a small family architectural firm in 2013. The firm was affected by two events: (1) Parker provided $12,500 of services on account, and (2) he purchased $3,000 of supplies on account. There were $250 of supplies on hand as of December 31, 2013.
Required:
a. Open T-accounts and record the two transactions in the accounts.
b. Record the required year end adjusting entry to reflect the use of supplies.
c. Record the preceding transactions in a horizontal statements model like the following one:
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d. Explain why the amounts of net income and net cash flow from operating activities differ.
e. Record and post the required closing entries, and prepare a post closing trial balance.