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  3. the following transactions occurred during march 2

The following transactions occurred during March 2024 for the Wainwright Corporation. The company owns and...

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Accounting

The following transactions occurred during March 2024 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

  1. Issued 36,000 shares of common stock in exchange for $360,000 in cash.
  2. Purchased equipment at a cost of $52,000. $16,000 cash was paid and a note payable to the seller was signed for the balance owed.
  3. Purchased inventory on account at a cost of $102,000. The company uses the perpetual inventory system.
  4. Credit sales for the month totaled $126,000. The cost of the goods sold was $76,000.
  5. Paid $5,600 in rent on the warehouse building for the month of March.
  6. Paid $6,600 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2024.
  7. Paid $76,000 on account for the merchandise purchased in 3.
  8. Collected $61,000 from customers on account.
  9. Recorded depreciation expense of $1,600 for the month on the equipment.

Required:

  1. Analyze each transaction by indicating the cash effect and classify each as a financing, investing, and/or operating activity (a transaction can represent more than one type of activity).
  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 $46,000.
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