Question

Stacey's Piano Rebuilding Company has been operating for one year. At the start of the second year, its income statement accounts had zero balances and its balance sheet account balances were as follows: Cash Accounts receivable Supplies Equipment Land Building $ 8,800 44,000 2,700 11,900 9,800 37,300 Accounts payable Unearned revenue Long-term note payable Common stock Additional paid-in capital Retained earnings $ 12,000 4,800 62,900 2,800 8,440 23,560 Required: For the transactions below, indicate how the transactions will affect the statement of cash flows. Cash outflows should be entered as negative amounts. Type of Activity Effect on Cash Flows Operating C. e. Transaction a. Rebuilt and delivered five pianos in January to customers who paid $23,800 in cash. b. Received a $1,080 deposit from customer who wanted her piano rebuilt. Rented a part of the building to a bicycle repair shop; received $1,330 for rent in January. d. Received $9,600 from customers as payment on their accounts. Received an electric and gas utility bill for $640 to be paid in February f. Ordered $1,440 in supplies. g. Paid $3,020 on account in January. Received from the home of Stacey Eddy, the major shareholder, a $1,400 tool (equipment) to h. use in the business in exchange for 100 shares of $1 par value stock. i. Paid $21,300 in wages to employees who worked in January. j. Declared and paid a $2,680 dividend (reduce Retained Earnings and Cash). k. Received and paid cash for the supplies in (f).

Answer 1

Transacttion		Type of	Effect on
			Activity	Cashflows
a.			Operating	23800
b.			Operating	1080
c.			Investing	1330
d.			Operating	9600
e.			NA	NA
f.			NA	NA
g.			Operating	-3020
h.			NA	NA
i.			Operating	-21,300
j.			Financing	-2,680
k.			Operating	-1,440