Instructor: HiraWaleed BBA02183

ACCOUNTING 2
PROGRAM: BBA

ASSIGNMENT

Submitted to:
Ma’am Hira Waleed
Submitted by: Mamoona 70059753

Section: D
Instructor: HiraWaleed BBA02183

Lahore Business School

Spring 2020
Assignment 3

Total Marks: 5 Topic: Statement of cash flows

Question 1

Answer: The differences are explained by differences in the timing of the

reporting of revenues and expenses under accrual accounting versus cash. Under
accrual accounting, companies report revenues when their performance obligation
is satisfied, even if cash hasn’t been received, and they report expenses when
incurred, even if cash hasn’t been paid.

Question 2: Solution:
During its first week, Hu Na Company had these transactions.
1. Issued 100,000 HK$50 par value ordinary shares for HK$8,000,000 cash.
Financing Activity
2. Borrowed HK$2,000,000 from Castle Bank, signing a 5-year note bearing 8%
interest.FinancingActivity
3. Purchased two semi-trailer trucks for HK$1,700,000 cash. Investing Activity
4. Paid employees HK$120,000 for salaries and wages. Operating Activity
5. Collected HK$200,000 cash for services performed. Operating Activity
Instructor: HiraWaleed BBA02183

Question 3
Piekarski OAO had the following transactions.
1. Issued €200,000 of bonds payable. Financing Activity
2. Paid utilities expense. Operating Activity
3. Issued 500 shares of preference shares for €45,000.FinancingActivity
4. Sold land and a building for €250,000.Investing Activity
5. Lent €30,000 to Zarembski Company, receiving Zarembski’s 1-year, 12% note.
Investing Activity

Question 4
Laurent AG had these transactions during 2017.
(a) Issued CHF50, 000 par value ordinary shares for cash. Financing Activities
(b) Purchased a machine for CHF30, 000, giving a long-term note in exchange.
Non-Cash Investing and Financing Activities
(c) Issued CHF200, 000 par value ordinary shares upon conversion of bonds
having a face value of CHF200, 000. Non-Cash Investing and Financing
Activities
(d) Declared and paid a cash dividend of CHF18, 000. Financing Activities
(e) Sold a long-term investment with a cost of CHF15, 000 for CHF15, 000 cash.
Investing Activities
(f) Collected CHF16, 000 of accounts receivable. Operating Activities
(g) Paid CHF18, 000 on accounts payable. Operating Activities