60.1K

Verified Solution

Link Copied!

Prepare an Horizontal statement Worksheet, and a cash flow statement, for the Sbiru Corp, with the following events; In the Cash Flow column, indicate whether the item is an operating activity (OA), an investing activity (IA), or a financing activity (FA) and net change in cash (NC). Use NA to indicate that an element is not affected by the event:

January 1 started the business by contributing $100,000 of personal capital in exchange for common stock

January 1 Paid $5,000 to the lawyers to incorporate your business entity

January 2 Acquired computers for the business for $5,000

January 3 Acquired inventory held for re-sale for $20,000

January 4 First sale took place, as you sold half of the inventory originally purchased. You sold it for $50,000 cash

February 1 hired your first employee, and paid $5,000 cash for wages. You paid the same amount of wages on the first of each month for the remainder of the year.

February 15 Sold the rest of the inventory for $75,000 cash

March 15 got sued by an outside party, and got an invoice from lawyers for $2,000 for legal work performed, due in April

April 1 Paid the legal invoice due

April 25 Bought more inventory from your supplier, for $20,000 on credit

May 1 Borrowed $100,000 from the bank, at an annual rate of 10%, due on December 31.

May 31 Sold all remaining inventory for $50,000, on credit.

June 30 Collected on all outstanding Accounts Receivable.

July 15 Sold all of the computers for $1,000 in cash.

September 1 bought more inventory, for $30,000 using long-term note payable.

October 1 sold inventory all that you had on hand, for $50,000 on credit.

November 1 collected on accounts receivable, in all cash.

December 31 made interest payment on the note

December 31 paid $5,000 bonus in cash to employee.

December 31 after books were closed, you paid 50% of all the remaining profit as cash dividend.

Answer & Explanation Solved by verified expert

See Answer