Answer:
$6,900
Explanation:
The cash flow statement includes three types of activities which are listed below:
1. Operating activities: This involves all transactions that after net income impact the working capital. It would subtract the rise in current assets and a reduction in current liabilities, while adding the decline in current assets and an increase in current liabilities.
It would adjust those changes in working capital. In addition, the depreciation cost is added to the net income, and the loss of asset sales is reduced, while the profit on asset sales is deducted
It also involve cash receipts and cash payments.
2. Investing activities: It tracks operations that include buying and selling long-term properties. The buying is a cash outflow whereas the sale is a cash inflow
3. Financing activities: It tracks transactions that have an impact on long-term debt and equity balance of shareholders. Share issue is a cash inflow while redemption and dividend are cash outflows.
So, the classification and the amount of cash flows is shown below:
a. Issue common stock for cash, $44,000 = $44,000 = Financing activities
b. Purchase building and land with cash, $29,000 = ($29,000) = Investing activities
c. Provide services to customers on account, $6,400 = Not applicable as this transaction does not involve any cash.
d. Pay utilities on building, $700 = ($700) = Operating activities
e. Collect $4,400 on account from customers = $4,400 = Operating activities
f. Pay employee salaries, $8,400. = ($8,400) = Operating activities
g. Pay dividends to stockholders, $3,400. = ($3,400) = Financing activities
So, the cash flow would be
= $44,000 - $29,000 - $700 + $4,400 - $8,400 - $3,400
= $6,900
