All-Star Automotive Company experienced the following accounting events during Year 2: 1. Performed services for $15,400 cash. 2. Purchased land for $8,400 cash. 3. Hired an accountant to keep the books. 4. Received $44,000 cash from the issue of common stock. 5. Borrowed $10,800 cash from State Bank. 6. Paid $5,400 cash for salaries expense. 7. Sold land for $10,800 cash. 8. Paid $4,400 cash on the loan from State Bank. 9. Paid $5,600 cash for utilities expense. 10. Paid a cash dividend of $2,400 to the stockholders. Required a. Indicate how each of the events would be classified on the statement of cash flows by selecting operating activities, investing activities, or financing activities. b. Prepare a statement of cash flows. Assume All-Star Automotive had a beginning cash balance of $10,400.

All-Star Automotive Company experienced the following accounting events during Year 2: 1. Performed services for $15,400 cash. 2. Purchased land for $8,400 cash. 3. Hired an accountant to keep the books. 4. Received $44,000 cash from the issue of common stock. 5. Borrowed $10,800 cash from State Bank. 6. Paid $5,400 cash for salaries expense. 7. Sold land for $10,800 cash. 8. Paid $4,400 cash on the loan from State Bank. 9. Paid $5,600 cash for utilities expense. 10. Paid a cash dividend of $2,400 to the stockholders. Required a. Indicate how each of the events would be classified on the statement of cash flows by selecting operating activities, investing activities, or financing activities. b. Prepare a statement of cash flows. Assume All-Star Automotive had a beginning cash balance of $10,400.

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Description: All-Star Automotive Company experienced the following accounting events during Year 2:1. Performed services for $15,400 cash.2. Purchased land for $8,400 cash.3. Hired an accountant to keep the books.4. Received $44,000 cash from the issue of common

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.] Maben Company was started on January 1, Year 1, and experienced the following events during its first year of operation: 1. Acquired $35,000 cash from the issue of common stock. 2. Borrowed $35,000 cash from National Bank. 3. Earned cash revenues of $53,000 for performing services. 4. Paid cash expenses of $47,500. 5. Paid a $1,500 cash dividend to the stockholders. 6. Acquired an additional $25,000 cash from the issue of common stock. 7. Paid $9,000 cash to reduce the principal balance of the bank note. 8. Paid $58,000 cash to purchase land. 9. Determined that the market value of the land is $81,000. c. Identify the asset source transactions and related amounts for Year 1. Sources of Assets Event Total sources of assets Amount
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