t View Go Tools Window Help CH16.1 Do In Class-4.pdf (page 1 of 3) During its fi

Question

t View Go Tools Window Help CH16.1 Do In Class-4.pdf (page 1 of 3) During its first week, Duffy & Stevenson Company had these transactions. 1.Issued 100,000 shares of $5 par value common stock for $800,000 cash. 2-Borrowed $200,000 from Castle Bank, signing a 5-year note bearing 8% interest. . 3.Purchased two semi-trailer trucks for $170,000 cash. . 4.Paid employees $12,000 for salaries and wages . 5.Collected $20,000 cash for services performed. Classify each of these transactions by type of cash flow activity. Josh's Photo Plus reported net income of $73,000 for 2017. Included in the income statement were depreciation expense of $7,000 and a gain on disposal of equipment of $2,500. Josh's comparative balance sheets show the following balances. 12/31/16 12/31/17 Accounts receivable $17,000 $21,000 6,000 2,200 Accounts payable Calculate net cash provided by operating activities for Josh's PhotoPlus.

Explanation / Answer

Q1. Transactions: Activities 1. Issued 100000 shares of $ 5 per share at $ 800000 cash Financing 2. Borrowed $ 200000 from Castle bank, signing note bearing 8% interest Financing 3. Purchase two semi trailer trucks for cash Investing 4. Paid employees for salaries and wages Operating 5. Collected cash for services performed Operating Q2. Cash flows from Operating activities: Net income for the period 73000 Adjustment required for reconciliation Depreciation 7000 Gain on disposal of equipment -2500 Increase in Accounts receivable -4000 Decrease in Accounts payable -3800 Net cash provided from Operating activities 69700

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