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Cornerstones of Financial Accounti...

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Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Using a Spreadsheet to Prepare a Statement of Cash Flows

Fleet Limousine Service Inc. began operations in late March 2019. At the end of 2019, the following balance sheet was prepared for Fleet.

Chapter 11, Problem 59PSB, Using a Spreadsheet to Prepare a Statement of Cash Flows Fleet Limousine Service Inc. began

Required:

1. Using a spreadsheet, prepare a statement of cash flows for 2019. Assume Fleet Limousine uses the indirect method.

2. CONCEPTUAL CONNECTION Discuss whether Fleet Limousine appeals to have matched the timing of inflows and outflows of cash.

To determine

(a)

Concept introduction:

Cash flow statement: It shows inflow and outflow of cash and it is divided into three categories, i.e., operating, investing and financing activities. It is also known as statement of cash flows.

To prepare:

Cash Flow Statement for 2019 using indirect method.

Explanation

Cash Flow Statement

</
Cash Flow from operating activities Amount ($)
Net Income for the period (17,200)
Adjustment required for reconciliation:
Depreciation 35,500
Increase in Supplies (3,100)
Increase in Accounts Receivable (15,900)
Increase in Accounts Payable 12,700
Increase in Unearned Service Revenue 21,800
Increase in Rent Payable 8,200
Increase in Salaries Payable 4,600
Net Cash Flow from Operating Activities 46,600
Cash Flow from Investing Activities
Equipment Purchases (233,400)
To determine

(b)

Concept introduction:

Cash flow statement: It shows inflow and outflow of cash and it is divided into three categories, i.e., operating, investing and financing activities. It is also known as statement of cash flows.

ToExplain:

Whether the company had matching cash inflows and outflows.

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