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Event

Type
of Activity

Effect on
March’s
Net Income

Effect on
March’s
Cash Flow

1

Sold $18,000 of goods on credit to customers. Received a 25%

down payment with the balance on account.

2

Paid $500 cash for office supplies that will be used during April.

3

Received $3,000 from a customer in full payment of her

account balance.

4

Borrowed $80,000 from a local bank to be repaid in monthly

installments plus interest starting in April.

5

Paid rent on the office space ($1,200 per month) for the

months of February, March, and April.

6

Distributed monthly paychecks to employees totaling $13,300.

30% was for work performed in February and the balance

for work performed in March.

7

Purchased new Internet server equipment at a cost of 50,000.00

8

Purchased a 3 year fire insurance policy at a total cost of

10,800. Its coverage began on March 1.

9

Purchased merchandise from suppliers on credit at a cost of 70,000.00

10

Collected $22,000 from customers in payment of their accounts. 80% of this amount was from sales recorded in

February and the balance was from March sales.

11

Collected four months’ rent in advance (at $700 per month)

from a tenant who will move in on April 1.

12

Paid $45,000 to suppliers in partial payment for goods

purchased in #9 above.

13

Sold $33,000 of merchandise to customers on credit.

14

Sold an investment in stocks and bonds for $28,000; the same

amount that had been paid for it. A 3 year, 9% note

receivable was accepted in full payment.