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lys-0071 [83]
3 years ago
10

The following selected transactions occur during the first year of operations. Determine how each should be reported in the stat

ement of cash flows.
1. Issued one million shares of common stock at $20 per share.
2. Paid $75,000 to suppliers for inventory.
3. Paid a dividend of $1 per share to common stockholders.
4. Loaned $50,000 to an employee and accepted a note receivable.
Business
1 answer:
svlad2 [7]3 years ago
5 0

Answer:

1. Issued one million shares of common stock at $20 per share.

The proceed of the issuance of common stock shall be taken as cash inflow in the financing activities.

2. Paid $75,000 to suppliers for inventory.

The payment made to the suppliers shall be taken as outflow in the operating activities.

3. Paid a dividend of $1 per share to common stockholders.

The payment made to common stockholders shall be taken as outflow in the financing activities.

4. Loaned $50,000 to an employee and accepted a note receivable.

The loan given to employee shall be taken as outflow in the operating activities.

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Explanation:

Using the Accrual Method of Accounting means that revenue is only to be recorded when it is earned i.e. when services have been delivered.

Any revenue received when the services have not been delivered will be recorded as Unearned Revenue.

With $528,000 in subscription revenue, the monthly subscription is;

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= $44,000

From June to December would be 7 months so they would have earned;

= 44,000 * 7

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The amount that they have not earned but have received would therefore be;

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= $220,000

<em>This amount will be recorded after they finish deliveries of magazines in next year May. </em>

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Prior to closing, a final walkthrough of the property should be performed to ensure that everything has remained as stated in th
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Answer:

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We've talked a lot about "fixed" and "variable" expenses. We've talked about the way these expenses impact your budget and your
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A man uses a loan program for small businesses to obtain a loan to help expand his vending machine business. The man borrows ​$2
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The ammount due at the end of the loan adds for $27,456

Explanation:

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