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9 September, 17:02

Prepare a statement of cash flows. Also assume the following:

a. The owner's initial investment consists of $38,000 cash and $46,000 in land in exchange for its common stock.

b. The company's $18,000 equipment purchase is paid in cash.

c. The accounts payable balance of $8,500 consists of the $3,250 office supplies purchase and $5,250 in employee salaries yet to be paid.

d. The company's rent, telephone, and miscellaneous expenses are paid in cash.

e. No cash has been collected on the $14,000 consulting fees earned.

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  1. 9 September, 17:03
    0
    11,360

    Explanation:

    Ebony Ernst Statement of Cash Flow

    Cash flow from operating activities:

    Payment towards expenses:

    Payment of salary 1,750

    Payment of rent 3,550

    Payment of telephone expense 760

    Payment of misc. expense 580

    Total of Cash flow from operating activities 6640

    (1750+3550+760+580)

    Cash flow from Investing activities:

    Purchase of office equipment (18,000)

    Cash flow from financing activities:

    Cash from common stock 38,000

    Cash paid (2,000)

    Cash flow from financing activities (38,000-2,000) 36,000

    Net cash flow during the year (18,000-6,640) 11,360

    Beginning balance 0

    Year end cash balance 11,360
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