Dogwood Stables, Inc., owns and races thoroughbred horses at tracks throughout t

Question

Dogwood Stables, Inc., owns and races thoroughbred horses at tracks throughout the United States. The controller for Dogwood prepares monthly financial statements. During the month of May one of the transactions related to the company was as follows:

On May 28, paid $1,700 for hay and feed received (and used) in April under credit terms of "due in 45 days."

1. Where would the $1,700 be included in the May "statement of cash flows" of Dogwood Stables, Inc.?
A. Operating activities
B. Investing activities
C. Financing activities
D. Would not be included as it is related to an April transaction
2. Which one of the following is the journal entry that should be recorded on May 28?
A. A/P               1,700               Cash               1,700 B. Cash               1,700                  A/P                  1,700 C. Hay and feed expense            1,700                            Cash                          1,700 D. No entry is needed on May 28 Dogwood Stables, Inc., owns and races thoroughbred horses at tracks throughout the United States. The controller for Dogwood prepares monthly financial statements. During the month of May one of the transactions related to the company was as follows:

On May 28, paid $1,700 for hay and feed received (and used) in April under credit terms of "due in 45 days."

1. Where would the $1,700 be included in the May "statement of cash flows" of Dogwood Stables, Inc.?
A. Operating activities
B. Investing activities
C. Financing activities
D. Would not be included as it is related to an April transaction 2. Which one of the following is the journal entry that should be recorded on May 28? A. A/P               1,700               Cash               1,700 B. Cash               1,700                  A/P                  1,700 C. Hay and feed expense            1,700                            Cash                          1,700 D. No entry is needed on May 28

Explanation / Answer

On May 28, paid $1,700 for hay and feed received (and used) in April under credit terms of "due in 45 days." 1. Where would the $1,700 be included in the May "statement of cash flows" of Dogwood Stables, Inc.? A. Operating activities 2. Which one of the following is the journal entry that should be recorded on May 28? A. A/P 1,700 Cash 1,700

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