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E4-19 - Wainwright Corporation - ACC305 Intermediate Accounting I Ashford University
Required:
1.Analyze each transaction and classify each as a financing, investing and/or operating activity (a
transaction can represent more than one type of activity). In doing so, also indicate the cash effect of
each, if any. If there is no cash effect, simply place a check mark (√) in the appropriate column(s).
2.Prepare a statement of cash flows, using the direct method to present cash flows from operating
activities. Assume the cash balance at the beginning of the month was $40,000.
Exercise 4-19
Requirement 1
Financing Investing Operating
1. $300,000
2. $(10,000)
3.
4.
5. $ (5,000)
6. (6,000)
7. (70,000)
8. 55,000
9.
__________ __________ __________
$300,000 $(10,000) $(26,000) = $264,000
Requirement 2
Wainwright Corporation
Statement of Cash Flows
For the Month Ended March 31, 2011
Cash flows from operating activities:
Collections from customers $ 55,000
Payment of rent (5,000)
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Payment of one-year insurance premium (6,000)
Payment to suppliers of merchandise for sale (70,000)
Net cash flows from operating activities $ (26,000)
Cash flows from investing activities:
Purchase of equipment (10,000)
Net cash flows from investing activities (10,000)
Cash flows from financing activities:
Issuance of common stock 300,000
Net cash flows from financing activities 300,000
Net increase in cash 264,000
Cash and cash equivalents, March 1 40,000
Cash and cash equivalents, March 31 $ 304,000
Noncash investing and financing activities:
Acquired $40,000 of equipment by paying cash and issuing a note as follows:
Cost of equipment $40,000
Cash paid 10,000
Note issued $30,000
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E4-19 - Wainwright Corporation - ACC305 Intermediate Accounting I – Ashford University Required: 1.Analyze each transaction and classify each as a financing, investing and/or operating activity (a transaction can represent more than one type of activity). In doing so, also indicate the cash effect of each, if any. If there is no cash effect, simply place a check mark (√) in the appropriate column(s). 2.Prepare a statement of cash flows, using the direct method to present cash flows from operating activities. Assume the cash balance at the beginning of the month was $40,000. Exercise 4-19 Requirement 1 1. 2. 3. 4. 5. 6. 7. 8. 9. Financing $300,000 ✓ Investing Operating $(10,000) ✓ ✓ $ (5,000) (6,000) (70,000) 55,000 ✓ __________ __________ __________ $300,000 $(10,000) $(26,000) = Requirement 2 Wainwright Corporation Statement of Cash Flows For the Month Ended March 31, 2011 Cash flows from operating activities: Collections from customers Payment of rent $ 55,000 (5,000) $264,000 Payment of one-year insurance premium Payment to suppliers of merchandise for sale (6,000) (70,000) Net cash flows from operating activities $ (26,000) Cash flows from investing activities: Purchase of equipment (10,000) Net cash flows from investing activities (10,000) Cash flows from financing activities: Issuance of common stock Net cash flows from financing activities Net increase in cash Cash and cash equivalents, March 1 Cash and cash equivalents, March 31 300,000 300,000 264,000 40,000 $ 304,000 Noncash investing and financing activities: Acquired $40,000 of equipment by paying cash and issuing a note as follows: Cost of equipment $40,000 Cash paid Note issued 10,000 $30,000 Name: Description: ...
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