Question

Exercise 17-03 b (Essay) Cushenberry Corporation had the following transactions. 1. Sold land (cost $12,000) for $15,000. 2. Issued common stock at par for $20,000. 3. Recorded depreciation on buildings for $17,000. 4. Paid salaries of $9,000. 5. Issued 1,000 shares of $1 par value common stock for equipment worth $8,000. 6. Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200. (b) For each transaction above indicate how it would affect the statement of cash flows using the indirect method. Click if you would like to Show Work for this question: Open Show Work

Answer 1

Answer-b)-

S.no.	Transactions	Amount	Shown as	Action
1	Sale of land	$15000	Investing Activities	Add
	Gain on sale of land	($15000-$12000)= $3000	Operating Activities	Less
2	Issued common stock	$20000	Financing activities	Add
3	Depreciation on building	$17000	Operating Activities	Add
4	Paid salaries	$9000	Not shown in indirect method	None
5	Issued shares for equipment purchase	$2000	Financing activities	Add
	Issued shares for equipment purchase	$8000	Non financing and investing activities	None
6	Equipment sold	$1200	Investing Activities	Add
	Loss on sale of equipment	($10000-$7000)-$1200 = $1800	Operating Activities	Add