The Following Transactions Apply to Kent Company

question 5

Essay

The following transactions apply to Kent Company.
1) Issued common stock for $21,000 cash
2) Provided services to customers for $28,000 on account
3) Purchased land for $18,000 cash
4) Incurred $9,000 of operating expenses on account
5) Collected $15,000 cash from customers for services provided in event #2
6) Paid $7,000 on accounts payable
7) Paid $2,500 dividends to stockholders
Required:
a) Identify the effect on the Statement of Cash Flows, if any, for each of the above transactions. Indicate whether each transaction involves operating, investing, or financing activities and the amount of increase or decrease.
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:

Productive Systems

Systems or mechanisms designed to generate outputs at an efficient rate by effectively using inputs.

Transform Resources

Involves altering or developing organizational resources to enhance efficiency or achieve a specific goal.

Operating Efficiencies

The capability of a firm to maximize outputs from given inputs, thereby minimizing its costs.

Competitive Advantage

The attributes or capabilities that allow an organization to outperform its competitors, typically leading to greater market share or profitability.