The following transactions occurred during March 2018 for the Wainwright Corporation The company owns and operates a wholesale warehouse Issued 50,000 shares of capital stock in exchange for $500,000 in cash Purchased equipment at a cost of $80,000 $30,000 cash was paid and a note payable was signed for the balance owed Purchased inventory on account at a cost of $130,000 The company uses the perpetual inventory system Credit sales for the month totaled $140,000 The cost of the goods sold was $90,000 Paid $7,000 in rent on the warehouse building for the month of March Paid $8,000 to an insurance company for fire and liability insurance for a one year period beginning April 1, 2018 Paid $90,000 on account for the merchandise purchased in 3 Collected $75,000 from customers on account Recorded depreciation expense of $3,000 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 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 $60,000

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Posted on Jun 27, 2024

The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse. Issued 50,000 shares of capital stock

The following transactions occurred during March 2018 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

Issued 50,000 shares of capital stock in exchange for $500,000 in cash.
Purchased equipment at a cost of $80,000. $30,000 cash was paid and a note payable was signed for the balance owed.
Purchased inventory on account at a cost of $130,000. The company uses the perpetual inventory system.
Credit sales for the month totaled $140,000. The cost of the goods sold was $90,000.
Paid $7,000 in rent on the warehouse building for the month of March.
Paid $8,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2018.
Paid $90,000 on account for the merchandise purchased in 3.
Collected $75,000 from customers on account.
Recorded depreciation expense of $3,000 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. 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 $60,000.