Question

During the month of August, the Boyce Company had the following transactions:

* Revenues of $120,000 were earned and received in cash.
* Bank loans of $18,000 were paid off.
* Equipment of $40,000 was purchased.
* Expenses of $73,600 were paid.
* Stockholders purchased additional shares for $44,000 cash.


A statement of cash flows for August, would report an increase in cash of:

Answer 1

The statement of cash flows for August would report an increase in cash of $32,400 for the Boyce Company, after considering all cash inflows such as revenues and stockholder investments, and cash outflows including bank loan payments, equipment purchases, and expenses.

Step-by-step explanation:

The student's question pertains to the preparation of a statement of cash flows for Boyce Company for the month of August. To calculate the net increase in cash, we need to consider all the cash inflows and outflows during the period. The revenue earned and received in cash, along with additional cash from stockholders, will be considered inflows. On the other hand, payments for bank loans, equipment purchases, and expenses will be considered outflows.

To determine the increase in cash, we do the following calculation:

• Revenues: +$120,000
• Bank loan payments: -$18,000
• Equipment purchases: -$40,000
• Expenses paid: -$73,600
• Stockholders' investments: +$44,000

Net increase in cash = $120,000 (revenues) - $18,000 (bank loans) - $40,000 (equipment) - $73,600 (expenses) + $44,000 (stockholders) = $32,400.

Therefore, the statement of cash flows for August would report an increase in cash of $32,400.

Answer 2

The statement of cash flows for the Boyce Company in August would report an increase in cash of $32,400, calculated by subtracting the total cash outflows from the total cash inflows.

Step-by-step explanation:

A student asks about the increase in cash according to the statement of cash flows for the Boyce Company during August, with various transactions listed. To calculate this, we need to consider cash inflows and outflows. Cash inflows include revenues and additional cash from stockholders, which are $120,000 and $44,000 respectively. Cash outflows include the payoff of bank loans, purchase of equipment, and paid expenses, which are $18,000, $40,000, and $73,600 respectively. The net increase in cash is the total inflows minus the total outflows.

Now, let's perform the calculation:
Net Increase in Cash = ($120,000 + $44,000) - ($18,000 + $40,000 + $73,600) = $164,000 - $131,600 = $32,400.

Therefore, the statement of cash flows for August would report an increase in cash of $32,400.