Question

Waldorf Company had the following transactions during the month of October Year 1:

(1) Cash received from bank loans was $60,000.
(2) Dividends of $18,500 were paid to stockholders in cash.
(3) Revenues earned and received in cash amounted to $100,500.
(4) Expenses incurred and paid were $78,000.


Make a cash flow statement for above information.

Answer 1

The cash flow statement for Waldorf Company for October Year 1 indicates a net increase in cash of $64,000 due to operating activities providing $22,500 and financing activities providing $41,500 in cash.

Step-by-step explanation:

Cash Flow Statement for Waldorf Company for October Year 1

To create a cash flow statement for the Waldorf Company for October Year 1, we need to categorize all transactions into operating, investing, and financing activities. In this case, we have the following:

Operating Activities

Revenues earned in cash: $100,500

Expenses paid in cash: -$78,000

Net cash provided by operating activities: $22,500

Financing Activities

Cash received from bank loans: $60,000

Dividends paid in cash: -$18,500

Net cash provided by (used in) financing activities: $41,500

Net Increase in Cash for October Year 1

Cash from operating activities and financing activities are added to find the net increase in cash for the month of October:

Net increase in cash: $22,500 (operating) + $41,500 (financing) = $64,000

The cash flow statement for Waldorf Company for the month of October Year 1 reveals a net increase in cash of $64,000. This increase is a result of cash inflows from operating activities and financing activities.