Bill and Steve recently formed a company that manufactures and sells high-end kitchen appliances. The following is
a. Bill and Steve each contributed cash in exchange for common stock in the company.
b. Land and a building to be used as a factory to make the appliances were purchased for cash.
c. Machines used to make the appliances were purchased for cash.
d. Various materials used in the production of the appliances were purchased for cash.
e. Three employees were paid cash to operate the machines and make the appliances.
f. Running low on money, the company borrowed money from a local bank.
h. The company sold the appliances to local homeowners for cash.
i. Due to extremely high popularity of its products, Bill and Steve built another factory building on its land for cash.
j. The company paid a cash dividend to Bill and Steve.
Classify each of the business activities listed as either an operating activity (O), an investing activity (I), or a financing activity (F).
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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