The following transactions pertain to the operations of Traci Company for 2011. 1. Acquired $30,000 cash from

Question:

The following transactions pertain to the operations of Traci Company for 2011.

1. Acquired $30,000 cash from the issue of common stock.

2. Provided $40,000 of services on account.

3. Incurred $25,000 of other operating expenses on account.

4. Collected $37,000 cash from accounts receivable.

5. Paid a $2,000 cash dividend to the stockholders.

6. Paid $18,000 cash on accounts payable.

7. Performed services for $9,000 cash.

8. Paid $2,000 cash for rent expense.

9. Paid $20,000 for year’s rent for office space.

10. Received $24,000 cash in advance for services to be performed over the next two years.

Required

a. Classify the cash flows from these transactions as operating activities (OA), investing activities (IA), or financing activities (FA). Use NA for transactions that do not affect the statement of cash flows.

b. Prepare a statement of cash flows. (There is no beginning cash balance.)

Dividend
A 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...