The following transactions apply to Baker Co. for 2010, its first year of operat

Question

The following transactions apply to Baker Co. for 2010, its first year of operations.

1. Issued $180,000 of common stock for cash.

2. Provided $88,000 of services on account.

3. Collected $74,000 cash from accounts receivable.

4. Loaned $13,000 BBC on September 1, 2010. The note had a one-year term to maturity and an 8 percent interest rate.

5. Paid $36,000 of salaries expense for the year.

6.Paid a $3,500 dividend to the stockholders.

7. Recorded the accrued interest on December 31, 2010 (see item 4).

8. Uncollectible accounts expense is estimated to be 1 percent of sales on account.

Make a Statement of Cash flows for 2010 using the above information

Explanation / Answer

Cash Flow for the year 2010 for Baker Co $ Remarks 1. Issued $180,000 of common stock for cash.          180,000 2. Provided $88,000 of services on account.          (88,000) 3. Collected $74,000 cash from accounts receivable.            74,000 4. Loaned $13,000 BBC on September 1, 2010. The note had a one-year term to maturity and an 8 percent interest rate.            13,000 5. Paid $36,000 of salaries expense for the year.          (36,000) 6.Paid a $3,500 dividend to the stockholders.            (3,500) 7. Recorded the accrued interest on December 31, 2010 (see item 4).                     -   No Cash movement 8. Uncollectible accounts expense is estimated to be 1 percent of sales on account.                     -   No Cash movement Cash flow during the year 2010          139,500

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