The Following Transactions Apply to Baird Corporation

question 13

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.
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 with a minus sign.
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:

Compulsory Arbitration Agreements

Contracts where parties agree in advance to resolve future disputes through arbitration rather than litigation, often as a condition of employment.

Fairness

The quality of making judgments that are free from discrimination, honesty, and equity in interpersonal and societal dealings.

Waive Rights

The act of voluntarily relinquishing or giving up a known right or privilege.

Past Practice

is an established custom or way of doing things that, over time, has been accepted and expected by both employers and employees within an organization.