Question

Exercise 12-03 Cullumber Corporation had the following transactions. 1. Sold land (cost $13,100) for $16,100. 2. Issued common stock at par for $20,000. 3. Recorded depreciation on buildings for $18,100. 4. Paid salaries of $10,100. 5. Issued 1,200 shares of $1 par value common stock for equipment worth $9,600. 6. Sold equipment (cost $12,800, accumulated depreciation $8,960) for $1,536.

(a) For each transaction above, prepare the journal entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Transaction Account Titles and Explanation Debit Credit 1. Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount 2. Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount 3. Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount 4. Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount 5. Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount 6. Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount Enter an account title to record NSF check on January 31 Enter a debit amount Enter a credit amount SHOW LIST OF ACCOUNTS

For each transaction above, (b) indicate how it would affect the statement of cash flows using the indirect method. (Do not leave any answer field blank. Enter 0 for amounts. Select "Not Reported" if it does not belong to any section.) 1. Cash receipt ReportedNot reported Investing and Financing sectionInvesting sectionOperating sectionFinancing sectionNot Applicable Gain on disposal of plant assets Not reportedReported Operating sectionInvesting and Financing sectionFinancing sectionNot ApplicableInvesting section 2. Cash receipt Not reportedReported Financing sectionOperating sectionNot ApplicableInvesting and Financing sectionInvesting section 3. Depreciation expense Not reportedReported Investing sectionInvesting and Financing sectionOperating sectionNot ApplicableFinancing section 4. Salaries and wages expense Not reportedReported Investing and Financing sectionInvesting sectionOperating sectionNot ApplicableFinancing section 5. Common stock for equipment Not reportedReported Operating sectionFinancing sectionInvesting and Financing sectionNot ApplicableInvesting section 6. Cash receipt ReportedNot reported Financing sectionOperating sectionInvesting and Financing sectionNot ApplicableInvesting section Loss on disposal of plant assets ReportedNot reported Investing sectionFinancing sectionNot ApplicableInvesting and Financing sectionOperating section

Answer 1

(a)

Transaction	Account title	Debit	Credit
1	Cash	16,100
	Land		13,100
	Gain on sale of land		3,000
2	Cash	20,000
	Common stock		20,000
3	Depreciation expense	18,100
	Accumulated depreciation-Building		18,100
4	Salaries expense	10,100
	Cash		10,100
5	Equipment	9,600
	Common stock (1,200 x$1)		1,200
	paid in capital in exess of par-Common stock		8,400
6	Cash	1,536
	Loss on sale of equipment	2,304
	Accumulated depreciation-Equipment	8,960
	Equipment		12,800

(b)

1. Cash receipt	Reported	Investing section
Gain on disposal of plant asst	Reported	Operating section
2. Cash receipt	Reported	Financing section
3. Depreciation expense	Reported	Operating section
4. Salaries and wages expense	Not reported	Not applicable
5. Common stock for equipment	Not reported	Investing and financing section
6. Cash receipt	Not reported	Investing section
Loss on disposal of plant assets	Reported	Operating section