Rocky owns and operates Balboa's Gym located in Philadelphia. The following transactions occur for the...
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Rocky owns and operates Balboa's Gym located in Philadelphia. The following transactions occur for the month of October: 1. October 2 Receive membership dues for the month of October totaling $9,000. 2. October 5 Issue common stock in exchange for cash, $10,000. 3. October 9 Purchase additional boxing equipment for $8,100, paying one-half of the amount in cash and issuing a note payable to the seller for the other one-half due by the end of the year. 4. October 12 Pay $1,500 for advertising regarding a special membership rate available during the month of October. 5. October 19 Pay dividends to stockholders, $2,900. 6. October 22 Pay liability insurance to cover accidents to members for the next six months, starting November 1, $7,800.
1. Record each transaction. 2. Identify the transactions involving cash. 3. Assume the balance of cash at the beginning of October is $15,100. Post each cash transaction to the Cash T-account. 4. Prepare a statement of cash flows for the month of October, properly classifying each of the cash transactions into operating, investing, and financing activities. Assume that the balance of cash at the beginning of October is $15,100.
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