Below are several transactions for Meyers Corporation for 2018. a. Issue common

Question

Below are several transactions for Meyers Corporation for 2018.

a. Issue common stock for cash, $44,000.
b. Purchase building and land with cash, $29,000.
c. Provide services to customers on account, $6,400.
d. Pay utilities on building, $700.
e. Collect $4,400 on account from customers.
f. Pay employee salaries, $8,400.
g. Pay dividends to stockholders, $3,400.

Required:

1. For each transaction, determine the amount of cash flows. If cash is involved in the transaction, indicate whether Meyers should classify it as operating, investing, or financing in a statement of cash flows. (Enter N/A if the question is not applicable to the statement. List cash outflows as negative amounts.)

2. Calculate net cash flows for the year. (List cash outflows as negative amounts.)

Net cash flows for the year =

3. Assuming the balance of cash on January 1, 2018, equals $3,800, calculate the balance of cash on December 31, 2018.

Transaction Cash Flows Operating,Investing or Financing Issue common stock for cash. Purchase building and land with cash. Provide services to customers on account. Pay utilities on building. Collect cash from customer on account. Pay employee salaries. Pay dividends to stockholders

Explanation / Answer

1)

2)Net cash flow = 44000-29000-700+4400-8400-3400=6900

3)balance of cash on December 31, 2018. = beginning cash+ net cash flow for year

                      = 3800+6900 = 10700

Transaction cash flow Operating,Investing or Financing a 44000 Financing activity b (29000) Investing activity c NA credit transaction d (700) operating activity e 4400 operating activity f (8400) operating activity g (3400) financing activity

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