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Question 2: Supreme Corporation had the following transactions: Paid salaries of $4,000. Issued 1,000...

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Question

Accounting

Question 2: Supreme Corporation had the following transactions:

  1. Paid salaries of $4,000.
  2. Issued 1,000 shares of $1 par value common stock for equipment worth $16,000.
  3. Sold equipment for $3,000.
  4. Sold land (cost $12,000) for $16,000.
  5. Borrowed $ 10,000 from creditors
  6. Cost of goods sold for the month is worth $780

  1. Use cash flow activity categories, determine which activity each of the above transactions belongs to. (2 marks each * 6 = 12 marks)
  2. Predict how each of the transactions would affect the statement of cash flow. (2 marks each * 6 = 12 marks)
  3. Prepare a statement of cash flow for the above transactions (10 marks)

Q3:

Explain why is it significant for a company to prepare a statement of cash flow in your own words. (5 marks)

Instructions:

Determine the COGS and ending inventory cost at July 31 using the assumtions (a) FIFO (4 marks) and (b) average-cost (4 marks)

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