ECON 4 Lecture 8: Feb 5 2019
Document Summary
Gerald prepays fakebook ,000 in cash for advertising services. Holly lends ,000 to an employee who promises to pay back the loan and 10% interest on the principal within the next 6 months. Since the loan is to someone within the company, it is not an investment. This is an operating expense because it is being used to help an employee. Isla"s company pays ,000 in dividends out to its shareholders. John pays his employees their salaries this period totaling ,000. Company sells 25,000 shares of stock to investors at a par value of a share for a total capital raise of ,000. Pay attorney legal fees of ,900 to incorporate business entity. Purchase of a building for ,000 and land for ,000. ,000 was paid up front and the remainder of the expense was covered with a mortgage (loan) from the bank. Lists cash receipts and disbursements by source/use of funds.
