Question

Stacey's Piano Rebuilding Company has been operating for one year (2019). At the start of 2020, its statement of earnings accounts had zero balances and the account balances on its statement of financial position were as follows: $ $ Cash Accounts receivable Supplies Equipment Land Building 14,500 Accounts payable 54,500 Deferred revenue (deposits) 3,300 Note payable (due in three years) 20,500 Contributed capital 16,500 Retained earnings 68,500 20.500 7,300 84,500 20,500 45,000 The following transactions occurred in January 2020: a. Received a $590 deposit from a customer who wanted her piano rebuilt. b. Rented a part of the building to a bicycle repair shop; received $590 for rent in January. c. Rebuilt and delivered five pianos to customers who paid $16,900 in cash. d. Received $8,900 from customers as payment on their accounts. e. Received an electric and gas utility bill for $510 to be paid in February f Ordered $890 in supplies. g. Paid $2,800 on account to suppliers. h. Received from Sam Mensa, the major shareholder, a $940 tool (equipment) to use in the business in exchange for the company's shares. i. Paid $8,950 in wages to employees for work in January j. Declared and paid a cash dividend of $3,450. k. Received and paid for the supplies ordered in (f). Required: Use the following chart to identify whether each of the transactions in results in a cash flow effect from operating (O), investing (), or financing (F) activities, and indicate the effect on cash (+ for increase and - for decrease). If there is no cash flow effect, write "none."

Answer 1

Transaction	Type of Activity (O, I or F)	Effect on Cash Flows
a.	O	$590
b.	O	$590
c.	O	$16,900
d.	O	$8,900
e.	None
f.	None
g.	O	($2,800)
h.	None
i.	O	($8,950)
j.	F	($3,450)
k.	O	($890)