Question

Exercise 4-15A Calculate net cash flows (LO4-7) Below are several transactions for Meyers Corporation for 2021. Issue common stock for cash, $60,000. Purchase building and land with cash, $45,000. Provide services to customers on account, $8,000. Pay utilities on building, $1,500. Collect $6,000 on account from customers. Pay employee salaries, $10,000. Pay dividends to stockholders, $5,000. Required: For each transaction, determine the amount of cash flows. If cash is involved in the transaction, select 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.)

Answer 1

Answer:

Meyers Corporation

Determining the amount of cash flows:

a. $60,000

b. -$45,000

c. -$1,500

d. $6,000

e. -$10,000

f. -$5,000

Classification as operating, investing, or financing activities:

a. Financing

b. Investing

c. Operating

d. Operating

e. Operating

f. Financing

Explanation:

Meyers Corporation prepares the statement of cash flows which classifies its financial activities into three main sections: operating activities, investing activities, and financing activities sections in order to present the statement in clear and understandable formats.  This statement is one of the main financial statements that report the corporation's financial position and performance at the end of an accounting period.