The Following Transactions Apply to Baird Corporation

question 6

Essay

The following transactions apply to Baird Corporation.1)Issued common stock for $40,000 cash.2)Provided services to customers for $32,000 on account.3)Borrowed $30,000 on September 1 at 8% interest with a one-year term.4)Purchased land for $32,000 cash.5)Paid $22,000 for operating expenses.6)Collected $28,000 cash from customers in partial settlement of its accounts receivable.7)Recorded interest on the note payable at year end.8)Paid $4,000 dividends to stockholders.
Required: a)Identify the effect on the statement of cash flows for each of the above transactions. Include the amount and the type of cash flow activity. Cash payments should be entered using parenthesis.b)Classify the above accounting events into one of four types of transactions (asset source, asset use, asset exchange, claims exchange).

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Definitions:

Expected Value

The long-term average or mean of random variables, representing the central tendency.

Perfect Information

A condition in decision theory and economics where all participants have full and identical knowledge about the actions others can take.

Power Company

A corporation that generates, transmits, and distributes electricity to consumers and businesses.

Expected Payoff

In decision theory and economics, the weighted average of all possible outcomes of a decision, where each outcome is weighted by its respective probability of occurrence.