Question

Prepare the Statement of Cash Flows for Smart Touch Learning for the month ended December 31, 2016 from the provided information. Within each section of the statement, use the drop-down menus to enter the accounts. Then enter the account balances and calculate ending balances. Enter decreases in cash with a minus sign or parentheses.

Cash balance, December 1, 2016 is $18,600
Transactions
Dec. 1 Common stock was issued to stockholders for $7,900 cash.
7 Purchased equipment for $1,900 on account.
14 Paid $19,800 cash for land.
17 Paid cash expenses: office rent, $1,600; employees' salaries, $1,400; utilities, $70.
23 Paid cash dividends of $2,500.
26 Earned service revenue for the month, $4,900, receiving cash.

Answer 1

Ending cash balance $6,030

Step-by-step explanation:

The preparation of the Cash Flows Statement is presented below:

Cash flow from Operating Activities

Add: Service revenue earned $4,900

Less: Office Rent -$1,600

Less: Employees salaries -$1,400

Less: Utilities -$70

Net cash flow provided by Operating Activities $1,830

Cash flow from Investing Activities

Less: Purchase of land $19,800

Net cash used by Investing Activities -$19,800

Cash flow from Financing Activities

Add: Issuance of common stock $7,900

Less: Dividend paid -$2,500

Net cash flow provided by Financing Activities $5,400

Net increase or decrease in cash would be

Net cash flow provided by Operating Activities $1,830 (A)

Net cash used by Investing Activities -$19,800 (B)

Net cash flow provided by Financing Activities $5,400 (C)

Decrease in cash -$12,570 (A + B + C)

Add: Beginning cash balance $18,600

Ending cash balance $6,030