Classify each of the following transactions as increasing, decreasing, or having no effect on cash flows: a. Purchasing inventory from a supplier on account b. Purchasing office supplies and writing a cheque to cover the amount c. Selling inventory to a customer on account d. Buying a building by making a down payment and taking out a mortgage for the balance of the amount owed e. Depreciating capital assets f. Making a payment on a bank loan, where the amount paid includes interest and a portion of the principal g. Issuing common shares h. Declaring and paying dividends to shareholders i. j. Paying wages owed to employees Receiving interest owed from a customer

Classify each of the following transactions as increasing, decreasing, or having no effect on cash flows: a. Purchasing inventory from a supplier on account b. Purchasing office supplies and writing a cheque to cover the amount c. Selling inventory to a customer on account d. Buying a building by making a down payment and taking out a mortgage for the balance of the amount owed e. Depreciating capital assets f. Making a payment on a bank loan, where the amount paid includes interest and a portion of the principal g. Issuing common shares h. Declaring and paying dividends to shareholders i. j. Paying wages owed to employees Receiving interest owed from a customer

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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4. PROBLEM 3-6 In-Transit Items LO 8 On July 31, 2019, Ping Company purchased 90% of Santos Company's common stock for $2,010,000 cash. Immediately after the acquisition, the two companies' balance sheets were as follows: Ping $ 320,000 S 150,000 Santos Cash Accounts receivable 600,000 300,000 Note receivable 100,000 -0- Inventory 1,840,000 400,000 Advance to Santos Company Investment in Santos Company 2,010,000 60,000 -0- -0- Plant and equipment (net) 3,000,000 1,500,000 Land 90.000 90,000 Total $8,020,000 $2,440,000 $ 800,000 S 140,000 100,000 Accounts payable Notes payable Common stock 900,000 2,400,000 900,000 680,000 620,000 $8,020,000 $2,440,000 Other contributed capital 2,200,000 Retained earnings 1,720,000 Total Santos Company has not yet recorded the $60,000 cash advance from Ping Company. Ping Company's accounts receivable include $20,000 due from Santos Company Santos Company's $100,000 note payable is payable to Ping Company Neither company has recorded $7,000 of interest…
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