Question

The following transactions pertain to the operations of Blair Company for 2014:

1.	Acquired $22,500 cash from the issue of common stock.
2.	Performed services for $36,500 cash.
3.	Paid a $29,200 cash advance for a one-year contract to rent equipment.
4.	Recognized $32,200 of accrued salary expense.
5.	Accepted a $2,200 cash advance for services to be performed in the future.
6.	Provided $17,150 of services on account.
7.	Incurred $9,750 of other operating expenses on account.
8.	Collected $5,200 cash from accounts receivable.
9.	Paid a $8,900 cash dividend to the stockholders.
10.	Paid $17,800 cash on accounts payable. Required a. Classify the cash flows from these transactions as operating activities (OA), investing activities (IA), or financing activities (FA). Use NA for transactions that do not affect the statement of cash flows.         Prepare a statement of cash flows. (There is no beginning cash balance.) (Amounts to be deducted should be indicated with a minus sign.) BLAIR COMPANY Statement of Cash Flows For the Year Ended December 31, 2014 Cash flows from operating activities Net cash flow from operating activities Cash flows from investing acivities Cash flows from financing activities Net cash flow from financing activities Net change in cash Ending cash balance

       

Answer 1

a) Classify :

1.Acquired $22,500 cash from the issue of common stock.	FA
2.Performed services for $36,500 cash.	OA
3. Paid a $29,200 cash advance for a one-year contract to rent equipment.	OA
4. Recognized $32,200 of accrued salary expense.	NA
5. Accepted a $2,200 cash advance for services to be performed in the future.	OA
6. Provided $17,150 of services on account.	NA
7. Incurred $9,750 of other operating expenses on account.	NA
8. Collected $5,200 cash from accounts receivable.	OA
9. Paid a $8,900 cash dividend to the stockholders.	FA
10. Paid $17,800 cash on accounts payable.	OA

Statement of cash flow :

Cash flow from operating activities
Cash received from customer	43900
Cash paid to supplier	-17800
Cash paid for rent equipment	-29200
Net cash flow from operating activities		-3100
Cash flow from investing activities
Cash flow from financing activities
Issue common Stock	22500
Dividend paid	-8900
Net cash flow from financing activities		13600
Net change in cash		10500
Beginning cash balance		0
Ending cash balance		10500