Recording the effect of events in a horizontal statements model

Texas Corporation experienced the following transactions during 2012.

1. Paid a cash dividend to the stockholders.

2. Acquired cash by issuing additional common stock.

3. Signed a contract to perform services in the future.

4. Performed services for cash.

5. Paid cash expenses.

6. Sold land for cash at an amount equal to its cost.

7. Borrowed cash from a bank.

8. Determined that the market value of the land is higher than its historical cost.


Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I), decreases (D), or does not affect (NA) each element of the financial statements. Also, in the Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction is shown as an example.

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