Final answer:
To create a cash flow statement for February for Farness Company, transactions must be sorted into operating, investing, and financing activities, starting with the opening cash balance and factoring in all inflows and outflows to reach the closing balance.
Step-by-step explanation:
The cash flow statement for a particular month is a financial report that shows the cash inflows and outflows for a company during that month. To construct a cash flow statement for Farness Company for the month of February, one would need to categorize all transactions into three sections: operating activities, investing activities, and financing activities. Operating activities include daily business operations like sales and purchases of goods, investing activities may involve buying or selling assets, and financing activities include transactions such as issuing shares or taking out loans.
Without the specific transactions listed for Farness Company, it's impossible to provide a detailed cash flow statement. However, the calculation would typically involve starting with the opening cash balance, adding cash inflows, subtracting cash outflows, and then calculating the ending cash balance for February. It is also essential to note non-cash transactions and to reconcile net income with cash provided by operating activities.
Remember, accuracy is key when it comes to financial statements, as they are crucial for internal decision-making and external reporting.