The Following Transactions Apply to Baker Corporation

question 40

Essay

The following transactions apply to Baker Corporation.
1) Issued common stock for $20,000 cash.
2) Provided services to customers for $16,000 on account.
3) Borrowed $15,000 on September 1 at 8% interest with a one year term.
4) Purchased land for $16,000 cash.
5) Paid $11,000 for operating expenses.
6) Collected $14,000 cash from customers.
7) Recorded interest on the note payable at year end.
8) Paid $2,000 dividends to stockholders.
Required:
a) Identify the effect on the statement of cash flows for each of the above transactions.
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:

Distilling

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Paragraph

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Distilling

The process of purifying a liquid by heating and cooling, or extracting the essential meaning or most important aspects of something.

Conclusion

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