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Preparing a Statement of Cash Flows Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. a. Invested cash in the business, $5,000. b. Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments. c. Paid office rent, $400. d. Received cash for services rendered, $700. e. Paid phone bill, $95. f. Received cash for services rendered, $600. g. Made payment on loan in transaction (b), $500. h. Paid wages to part-time employee, $800. i. Paid electricity bill, $100. j. Withdrew cash for personal use, $500. k. Paid wages to part-time employee, $600. Required: 1. Prepare a statement of cash flows based on the transactions reported. Use a minus sign to indicate cash outflows, cash payments or decreases in cash. Bob Jacobs Advertising Agency Statement of Cash Flows For Month Ended January 31, 20-- Cash flows from operating activities: Cash received from clients v Cash paid for rent v 400 X Cash paid for phone 95 Cash paid for wages 800 X Cash paid for electricity v Total cash paid for operations Net cash used for operating activities Cash flows from investing activities: Cash paid for office equipment v 2,500 X Net cash used for investing activities Cash flows from financing activities: Cash investment by owner v 5,000 Cash withdrawal by owner v 2,500 X Payment made on loan 2,500 X Net cash provided by financing activities Net increase in cash

Preparing a Statement of Cash Flows Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. a. Invested cash in the business, $5,000. b. Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments. c. Paid office rent, $400. d. Received cash for services rendered, $700. e. Paid phone bill, $95. f. Received cash for services rendered, $600. g. Made payment on loan in transaction (b), $500. h. Paid wages to part-time employee, $800. i. Paid electricity bill, $100. j. Withdrew cash for personal use, $500. k. Paid wages to part-time employee, $600. Required: 1. Prepare a statement of cash flows based on the transactions reported. Use a minus sign to indicate cash outflows, cash payments or decreases in cash. Bob Jacobs Advertising Agency Statement of Cash Flows For Month Ended January 31, 20-- Cash flows from operating activities: Cash received from clients v Cash paid for rent v 400 X Cash paid for phone 95 Cash paid for wages 800 X Cash paid for electricity v Total cash paid for operations Net cash used for operating activities Cash flows from investing activities: Cash paid for office equipment v 2,500 X Net cash used for investing activities Cash flows from financing activities: Cash investment by owner v 5,000 Cash withdrawal by owner v 2,500 X Payment made on loan 2,500 X Net cash provided by financing activities Net increase in cash

College Accounting, Chapters 1-27
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter2: Analyzing Transactions: The Accounting Equation
Section: Chapter Questions
Problem 4SEB: EFFECTS OF TRANSACTIONS (BALANCE SHEET ACCOUNTS) Jon Wallace started a business. During the first...
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Preparing a Statement of Cash Flows Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. a. Invested cash in the business, $5,000. b. Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments. c. Paid office rent, $400. d. Received cash for services rendered, $700. e. Paid phone bill, $95. f. Received cash for services rendered, $600. g. Made payment on loan in transaction (b), $500. h. Paid wages to part-time employee, $800. i. Paid electricity bill, $100. j. Withdrew cash for personal use, $500. k. Paid wages to part-time employee, $600. Required: 1. Prepare a statement of cash flows based on the transactions reported. Use a minus sign to indicate cash outflows, cash payments or decreases in cash. Bob Jacobs Advertising Agency Statement of Cash Flows For Month Ended January 31, 20-- Cash flows from operating activities: Cash received from clients v Cash paid for rent 400 X Cash paid for phone 95 X Cash paid for wages 800 Cash paid for electricity 100 X Total cash paid for operations Net cash used for operating activities Cash flows from investing activities: Cash paid for office equipment v 2,500 X Net cash used for investing activities Cash flows from financing activities: Cash investment by owner 5,000 V Cash withdrawal by owner 2,500 Payment made on loan 2,500 X Net cash provided by financing activities Net increase in cash
Transcribed Image Text:Preparing a Statement of Cash Flows Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. a. Invested cash in the business, $5,000. b. Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments. c. Paid office rent, $400. d. Received cash for services rendered, $700. e. Paid phone bill, $95. f. Received cash for services rendered, $600. g. Made payment on loan in transaction (b), $500. h. Paid wages to part-time employee, $800. i. Paid electricity bill, $100. j. Withdrew cash for personal use, $500. k. Paid wages to part-time employee, $600. Required: 1. Prepare a statement of cash flows based on the transactions reported. Use a minus sign to indicate cash outflows, cash payments or decreases in cash. Bob Jacobs Advertising Agency Statement of Cash Flows For Month Ended January 31, 20-- Cash flows from operating activities: Cash received from clients v Cash paid for rent 400 X Cash paid for phone 95 X Cash paid for wages 800 Cash paid for electricity 100 X Total cash paid for operations Net cash used for operating activities Cash flows from investing activities: Cash paid for office equipment v 2,500 X Net cash used for investing activities Cash flows from financing activities: Cash investment by owner 5,000 V Cash withdrawal by owner 2,500 Payment made on loan 2,500 X Net cash provided by financing activities Net increase in cash
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