National Service Company experienced the following accounting events during 2016: 1. Paid $4,000 cash for salary expense.
Question:
National Service Company experienced the following accounting events during 2016:
1. Paid $4,000 cash for salary expense.
2. Borrowed $8,000 cash from State Bank.
3. Received $30,000 cash from the issue of common stock.
4. Purchased land for $8,000 cash.
5. Performed services for $14,000 cash.
6. Paid $4,200 cash for utilities expense.
7. Sold land for $7,000 cash.
8. Paid a cash dividend of $1,000 to the stockholders.
9. Hired an accountant to keep the books.
10. Paid $3,000 cash on the loan from State Bank.
Required
a. Indicate how each of the events would be classified on the statement of cash flows as operating activities (OA), investing activities (IA), financing activities (FA), or not applicable (NA).
b. Prepare a statement of cash flows for 2016. Assume National Service had a beginning cash balance of $9,000 on January 1, 2016.
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a Event Statement of Cash Flow Classification 1 OA 2 FA 3 FA 4 IA 5 OA 6 OA 7 IA 8 F...View the full answer
Fundamental Financial Accounting Concepts
ISBN: 978-0078025907
9th edition
Authors: Thomas Edmonds, Christopher Edmonds
