# Step-by-Step Solution Let's break down the problem into two parts as required: --- ## **Required A: Classification of Cash Flow Activities** Classify each event as **Operating (O)**, **Investing (I)**, or **Financing (F)** activity: | # | Event | Classification | |---|----------------------------------------------------------------------------|--------------------| | 1 | Performed services for $15,300 cash | Operating (O) | | 2 | Purchased land for $8,300 cash | Investing (I) | | 3 | Hired an accountant to keep the books (paid salary/wage) | Operating (O) | | 4 | Received $43,000 cash from the issue of common stock | Financing (F) | | 5 | Borrowed $10,600 cash from State Bank | Financing (F) | | 6 | Paid $5,300 cash for salaries expense | Operating (O) | | 7 | Sold land for $10,600 cash | Investing (I) | | 8 | Paid $4,300 cash on the loan from State Bank (principal repayment) | Financing (F) | | 9 | Paid $5,500 cash for utilities expense | Operating (O) | |10 | Paid a cash dividend of $2,300 to the stockholders | Financing (F) | --- ## **Required B: Prepare Statement of Cash Flows** Assume beginning cash balance of **$10,300**. ### **1. Operating Activities:** - Inflows: - Performed services: **+$15,300** - Outflows: - Paid accountant: **-** - Paid salaries: **-$5,300** - Paid utilities: **-$5,500** - **Net Cash from Operating Activities:** $15,300 - $5,300 - $5,500 = **$4,500** ### **2. Investing Activities:** - Outflows: - Purchased land: **-$8,300** - Inflows: - Sold land: **+$10,600** - **Net Cash from Investing Activities:** $10,600 - $8,300 = **$2,300** ### **3. Financing Activities:** - Inflows: - Issued common stock: **+$43,000** - Borrowed from bank: **+$10,600** - Outflows: - Repaid loan: **-$4,300** - Paid dividends: **-$2,300** - **Net Cash from Financing Activities:** $43,000 + $10,600 - $4,300 - $2,300 = **$47,000** --- ### **4. Calculate Ending Cash Balance** \[ \text{Beginning Cash} + \text{Net Cash from Operating} + \text{Net Cash from Investing} + \text{Net Cash from Financing} \] \[ 10,300 + 4,500 + 2,300 + 47,000 = \boxed{64,100} \] --- ## **Statement of Cash Flows (Summary Table)** | Section | Inflows | Outflows | Net Cash Flow | |-----------------------|--------------|--------------|---------------| | Operating Activities | $15,300 | $10,800 | $4,500 | | Investing Activities | $10,600 | $8,300 | $2,300 | | Financing Activities | $53,600 | $6,600 | $47,000 | | **Total Increase** | | | **$53,800** | | **Beginning Cash** | | | $10,300 | | **Ending Cash** | | | **$64,100** | --- ### **Final Answer** - **a.** Classification done above. - **b.** Statement of cash flows prepared and ending cash is **$64,100**. Let me know if you need this in a formal statement format!