Question

Gabi Gram started The Gram Co., a new business that began operations on May 1. The Gram Co. completed the following transactions during its first month of operations.
May 1 G. Gram invested $43,500 cash in the company in exchange for its common stock.
1 The company rented a furnished office and paid $2,400 cash for May’s rent.
3 The company purchased $1,940 of office equipment on credit.
5 The company paid $780 cash for this month’s cleaning services.
8 The company provided consulting services for a client and immediately collected $5,300 cash.
12 The company provided $2,400 of consulting services for a client on credit.
15 The company paid $790 cash for an assistant’s salary for the first half of this month.
20 The company received $2,400 cash payment for the services provided on May 12.
22 The company provided $3,200 of consulting services on credit.
25 The company received $3,200 cash payment for the services provided on May 22.
26 The company paid $1,940 cash for the office equipment purchased on May 3.
27 The company purchased $80 of office equipment on credit.
28 The company paid $790 cash for an assistant’s salary for the second half of this month.
30 The company paid $300 cash for this month’s telephone bill.
30 The company paid $250 cash for this month’s utilities.
31 The company paid $1,600 cash in dividends to the owner (sole shareholder).
Prepare the statement of cash flows for the month of May. Complete this question by entering your answers in the tabs below Income State Prepare the income statement for May Balance State Sheetof Cash GRAM Income Statement For Month Ended May 31 Total expenses Income Statement Statement of Retained Earnings>

Answer 1

Answer:

Gram Co.

Statement of cash flows

For the month ended May 31, 202x

Cash flows from operating activities:

Net income                                                  $5,590

Adjustments to net income:

Increase in accounts payable                         $80

Net cash flow from operating activities    $5,670

Cash flows from investing activities:

Purchase of office equipment                 ($2,020)

net cash flow from investing activities    ($2,020)

Cash flows from financing activities:

Issuance of common stock                     $43,500

Paid dividends                                         ($1,600)

Net cash flow from financing activities   $41,900

Net cash increase during May               $45,550

Initial balance of cash account                        $0

Ending balance of cash account (5/31) $45,550

Explanation:

operating cash flows:

rent expense ($2,400)

cleaning services ($780)

service revenue $5,300 + $2,400 + $3,200

assistant's salary ($790)

accounts payable increased by $80

assistant's salary ($790)

utilities bill ($550)

total revenue = $10,900

total expenses = $5,310

net income = $5,590

investing cash flows:

purchased equipment for $1,940

purchased office equipment $80

financing cash flows:

Issuance of common stock $43,500

paid dividends ($1,600)