Statement of Cash Flows

Cushenberry Corporation had the following transactions.

1. Sold land (cost $12,000) for $15,000
2. Issued common stock at par for $20,000
3. Recorded depreciation on buildings for $17,000.
4. Paid salaries of $9,000.
5. Issued 1,000 shares of $1 par value common stock for equipment worth $8,000
6. Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200

Instructions

For each transaction above, (a) prepare the journal entry, and (b) indicate how it would affect the statement of cash flows using the indirect method.

Solutions