Question

Refer to AP3– 3.
a. Received contributions of $ 30,000 in total from four shareholders to form the corporation.
b. Paid store rent for three months at $ 1,600 per month (recorded as prepayment).
c. Purchased supplies for $ 800 cash.
d. Purchased chocolates on account for $ 10,000, due in 60 days.
e. Issued additional shares to new investors for $ 20,000 cash.
f. Used the money from (e) to purchase a computer for $ 4,000 (for recordkeeping and inventory tracking). The rest was used to buy furniture and fixtures for the store.
g. Placed a grand- opening advertisement in the local paper for $ 850 cash.
h. Sold chocolates for $ 3,600; $ 3,050 was in cash and the rest on accounts. The cost of the chocolates sold was $ 2,000.
i. Made a $ 1,000 payment on trade payables.
j. Incurred and paid employee wages of $ 2,520.
k. Collected trade receivables of $ 100 from customers.
l. Made a repair on one of the display cases for $ 268 cash.
m. Made cash sales of $ 5,200 during the rest of the month. The cost of the goods sold was $ 2,800.
Required
Use the following chart to identify whether each of the transactions in AP3– 3 results in a cash flow effect from operating (O), investing (I), or financing (F) activities, and indicate the direction and the effect on cash (+ for increase and – for decrease). If there is no cash flow effect, write “none.” The first transaction is provided as an example.


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  • CreatedAugust 04, 2015
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