Below are several transactions for a company for Year 1. a. Issue common stock for cash, $40,000. b. Purchase building and land with cash, $25,000. c. Provide services to customers on account, $6,000. d. Pay utilities on building, $500. e. Collect $4,000 on account from customers. f. Pay employee salaries, $8,000. g. Pay dividends to stockholders, $3,000. Required: 1. For each transaction, determine the amount of cash flows. If cash is involved in the transaction, indicate whether the company should classify it as operating, investing, or financing in a statement of cash flows. (Enter N/A if the question is not applicable to the statement. List cash outflows as negative amounts.)
Below are several transactions for a company for Year 1. a. Issue common stock for cash, $40,000. b. Purchase building and land with cash, $25,000. c. Provide services to customers on account, $6,000. d. Pay utilities on building, $500. e. Collect $4,000 on account from customers. f. Pay employee salaries, $8,000. g. Pay dividends to stockholders, $3,000. Required: 1. For each transaction, determine the amount of cash flows. If cash is involved in the transaction, indicate whether the company should classify it as operating, investing, or financing in a statement of cash flows. (Enter N/A if the question is not applicable to the statement. List cash outflows as negative amounts.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Below are several transactions for a company for Year 1.
a. Issue common stock for cash, $40,000.
b. Purchase building and land with cash, $25,000.
c. Provide services to customers on account, $6,000.
d. Pay utilities on building, $500.
e. Collect $4,000 on account from customers.
f. Pay employee salaries, $8,000.
g. Pay dividends to stockholders, $3,000.
Required:
1. For each transaction, determine the amount of cash flows. If cash is involved in the transaction, indicate whether the company should classify it
as operating, investing, or financing in a statement of cash flows. (Enter N/A if the question is not applicable to the statement. List cash
outflows as negative amounts.)
Operating, Investing
Transaction
Cash Flows
or Financing
Issue common stock for cash.
Purchase building and land with cash.
Provide services to customers on account.
Pay utilities on building.
Collect cash from customer on account.
Pay employee salaries.
Pay dividends to stockholders
2. Calculate net cash flows for the year. (List cash outflows as negative amounts.)
Transcribed Image Text:PM Tue Nov
A ezto.mheducation.com
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Provide services to customers on account.
Pay utilities on building.
Collect cash from customer on account.
Pay employee salaries.
Pay dividends to stockholders
2. Calculate net cash flows for the year. (List cash outflows as negative amounts.)
Net cash flows for the year
3. Assuming the balance of cash on January 1, Year 1, equals $3,400, calculate the balance of cash on December 31, Year 1.
Cash balance
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