Question
J. Kamas and G. Charrier have been operating a catering business for several years. In March, the partners plan to expand by opening a retail
J. Kamas and G. Charrier have been operating a catering business for several years. In March, the partners plan to expand by opening a retail sales shop. They have decided to form the business as a corporation called Traveling Gourmet, Incorporated. The following transactions occurred in March:
- Received $99,000 cash from each of the two shareholders to form the corporation, in addition to $3,900 in accounts receivable, $9,100 in equipment, a van (equipment) appraised at a fair value of $16,800, and $2,150 in supplies. Gave the two owners each 880 shares of common stock with a par value of $1 per share.
- Purchased a vacant store for sale in a good location for $550,000, making a $110,000 cash down payment and signing a 10-year mortgage note from a local bank for the rest.
- Borrowed $69,000 from the local bank on a 10 percent, one-year note.
- Purchased food and paper supplies costing $14,000 in March; paid cash.
- Catered four parties in March for $6,100; $1,980 was billed and the rest was received in cash.
- Sold food at the retail store for $17,850 cash.
- Used food and paper supplies costing $11,210.
- Received a $610 telephone bill for March to be paid in April.
- Paid $553 in gas for the van in March.
- Paid $10,080 in wages to employees who worked in March.
- Paid a $490 dividend from the corporation to each owner.
- Purchased $69,000 of equipment (refrigerated display cases, cabinets, tables, and chairs) and renovated and decorated the new store for $29,500 (added to the cost of the building); paid cash.
Identify operating, investing, or financing activities for each number affecting cash flows. Include the direction and dollar amount of the effect.
Note: Cash outflows should be indicated with a minus sign. If there is no effect on the statement of cash flows, select "No effect"
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