Saved All-Star Automotive Company experienced the following accounting events du

Question

Saved All-Star Automotive Company experienced the following accounting events during 2018: 1. Performed services for $15,000 cash 2 Purchased land for $8,000 cash. 3. Hired an accountant to keep the books. 4. Received $40,000 cash from the issue of common stock 5. Borrowed $10,000 cash from State Bank 6. Paid $5,000 cash for salary expense 7. Sold land for $10,000 cash. 8. Paid $4,000 cash on the loan from State Bank. 9. Paid $5,200 cash for utilities expense. 10. Paid a cash dividend of $2,000 to the stockholders. Required a. Indicate how each of the events would be classified on the statement of cash flows as (IA), financing activities (FA), or not applicable (NA). b. Prepare a statement of cash flows for 2018. Assume All-Star Automotive company hada January 1, 2018 Complete this question by entering your answers in the tabs below. Required A Required B K. Prev 3 of 20 Next

Explanation / Answer

Solution:-

a.

b.

Note:- you image is croped and not shown beginning cash balance. Please add beginning cash balance in net increase in cash, you will find ending cash balance.

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Sr. No. Events Classification 1. Performed services OA 2. Purchased land IA 3. Hired an accountant NA 4. Issue of common stock FA 5. Borrowed FA 6. Salary expenses OA 7. Sold land IA 8. Paid loan FA 9. Paid utilities expenses OA 10. Cash dividend FA

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