The following transactions apply to Baird Corporation.1) Issued common stock for $40,000 cash.2) Provided services to customers for $32,000 on account.3) Borrowed $30,000 on September 1 at 8% interest with a one-year term.4) Purchased land for $32,000 cash.5) Paid $22,000 for operating expenses.6) Collected $28,000 cash from customers.7) Recorded interest on the note payable at year end.8) Paid $4,000 dividends to stockholders.Required:a) Identify the effect on the statement of cash flows for each of the above transactions. Include the amount and the type of cash flow activity. Cash payments should be entered using parenthesis.b) Classify the above accounting events into one of four types of transactions (asset source, asset use, asset exchange, claims exchange).
What will be an ideal response?
| ? | a) | b) |
| Event | Cash Flow | Transaction Type |
| 1) | 40,000 FA | Asset Source |
| 2) | NA | Asset Source |
| 3) | 30,000 FA | Asset Source |
| 4) | -32,000 IA | Asset Exchange |
| 5) | -22,000 OA | Asset Use |
| 6) | 28,000 OA | Asset Exchange |
| 7) | NA | Claims Exchange |
| 8) | -4,000 FA | Asset Use |
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