Royal Carpet Cleaning provided $90,000 of services during 2011, its first year of operations. All customers paid for the services with major credit cards. Royal submitted the credit card receipts to the credit card company immediately. The credit card company paid Royal cash in the amount of face value less a 3 percent service charge.


On the Balance Sheet: Assets = Liability + Equity

On the Income Statement: Revenue – Expenses = Net Income

Fill in the table and answer questions:

Balance Sheet

Event: Cash + Accounts Receivable = (?) + Retained Earnings

Income Statement

Event: Revenue (?) – Expenses (?) = Net Income (?)

What is the Statement of Cash Flows for this comapny?

Operating Activity (OA)?, Investing Activity (IA)?, Financing Activity (FA)?, or Not Affected (NA)?

What is the amount of total assets at the end of the accounting period?

What is the amount of revenue reported on the income statement?

What is the amount of cash flow from operating activities reported on the statement of cash flows?