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 $7,800 cash. 7 Purchased equipment for $2,000 on account. 14 Paid $19,900 cash for land. 17 Paid cash expenses: office rent, $1,400; employees' salaries, $1,200; utilities, $300. 23 Paid cash dividends of $2,300. 26 Earned service revenue for the month, $5,000, receiving cash. Cash flows from operating activitiesReceipts: Collection from customers Payments: For rentFor salariesFor utilitiesNet cash provided (used) by operating activitiesCash flows from investing activitiesAcquisition of LandNet cash provided (used) by investing activitiesCash flows from financing activitiesIssuance of cash dividendsPayment of cash dividendsNet cash provided (used) by financing activitiesNet increase (decrease) in cash Cash balance, December 1, 2016 Cash balance, December 31, 2016

Answer 1

Answer:

Ending cash balance $6,300

Explanation:

The preparation of the Cash Flows Statement is presented below:

Cash flow from Operating Activities

Add: Service revenue earned        $5,000

Less: Office Rent                           -$1,400

Less: Employees salaries             -$1,200

Less: Utilities                                 -$300

Net cash flow provided by Operating Activities $2,100

Cash flow from Investing Activities

Less: Purchase of land $19,900

Net cash used by Investing Activities -$19,900

Cash flow from Financing Activities

Add: Issuance of common stock $7,800

Less: Dividend paid                      -$2,300

Net cash flow provided by Financing Activities $5,500

Net rise or decrease in cash is

Net cash flow provided by Operating Activities $2,100 (A)

Net cash used by Investing Activities -$19,900 (B)

Net cash flow provided by Financing Activities $5,500 (C)

Decrease in cash -$12,300   (A + B + C)

Add: Beginning cash balance   $18,600

Ending cash balance $6,300