A company enters into the following transactions: a. Issued $25,000 of common stock for cash. b. Issued

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A company enters into the following transactions:
a. Issued $25,000 of common stock for cash.
b. Issued a long-term note in exchange for a machine worth $45,000.
c. Received $21,000 in cash from collecting accounts receivable.
d. Paid $7,500 on accounts payable.
e. Issued $50,000 of common stock to satisfy a $50,000 note payable.
f. Declared and paid a cash dividend of $78,000.
g. Sold an investment costing $10,000 for $10,000 in cash.
Required
Classify each transaction as a cash inflow or a cash outflow from operating activities, investing activities, or financing activities, or as a non-cash transaction.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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...
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Financial ACCT2

ISBN: 978-1111530761

2nd edition

Authors: Norman H. Godwin, C. Wayne Alderman

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