Prepare statement of cash flows-all-star automotive company

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Reference no: EM131795643

All-Star Automotive Company experienced the following accounting events during 2016:

1. Performed services for $25,000 cash.
2. Purchased land for $6,000 cash.
3. Hired an accountant to keep the books.
4. Received $50,000 cash from the issue of common stock.
5. Borrowed $5,000 cash from State Bank.
6. Paid $14,000 cash for salary expense.
7. Sold land for $9,000 cash.
8. Paid $10,000 cash on the loan from State Bank.
9. Paid $2,800 cash for utilities expense.
10. Paid a cash dividend of $5,000 to the stockholders.

Required

a. Indicate how each of the events would be classified on the statement of cash flows as operating activities (OA), investing activities (IA), financing activities (FA), or not applicable (NA).

b. Prepare a statement of cash flows. Assume All-Star Automotive had a beginning cash balance of $9,000.

Reference no: EM131795643

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