Question

Osprey, Inc. began operations 1/1/2020. Below are the transactions that occurred during January, 2020. For each transaction, indicate the amount that would be reflected on the Income Statement and the Operating section of the SOCF (direct method), respectively. Then, compute net income and cash flows from operations in the bottom row. Transactions: TIS SOCF Operating 1. Shareholders contributed $20,000 cash to the company in exchange for stock. 2. Equipment was purchased for $9,000 by taking out a loan. 3. Inventory of $8,000 was purchased on credit. 4. Sold $6,000 of the inventory purchased in #3 for $11,000; all sales are on credit. 5. Customers paid $9,000 of their outstanding A/R from #4. 6. Paid $1,200 for a twelve-month insurance policy, with coverage effective 1/1/20. 7. Depreciation of $300 was taken on the equipment purchased in #2 8. Employees earned $1,600 in wages but they have not yet been paid at the end of the month. | 9. Received $2,000 cash from customers for services to be I performed next month. 10. Paid a dividend of $500. Net income, Operating cash flows (show in respective column) bea

Answer 1

Classification

No	Transaction	I/S	SOCF
1	Shareholders contributed $20000 Cash to the company in exchange for stock
2	Equipment was purchased for $9000 by taking out a loan
3	Inventory of $8000 was purchased on credit	-8000
4	Sold $6000 of the inventory in #3 for 11000 all sales are on credit	11000
5	Customers paid $9000 of their outstanding A/R from #4		9000
6	Paid $1200 for a twelve month insurance policy with coverage effective 1/1/20		-1200
7	Depreciation of $300 was taken on the equipment purchased in #2	-300
8	Employees earned $1600 in wages but they have not yet been paid at the end of the month	-$1600
9	Received $2000 Cash from customers for services to be performed next month		2000
10	Paid a dividend of $500
	Net income, operating cash flow	1100	9800