Question
Fleet Limousine Service Inc. began operations in late March 2019. At the end of 2019, the following balance sheet was prepared for Fleet. Fleet Limousine
Fleet Limousine Service Inc. began operations in late March 2019. At the end of 2019, the following balance sheet was prepared for Fleet.
| Fleet Limousine Service Inc. |
| Balance Sheet |
| December 31, 2019 |
| 1 | ASSETS |
|
|
| 2 | Current assets: |
|
|
| 3 | Cash | $7,200.00 |
|
| 4 | Accounts receivable | 15,900.00 |
|
| 5 | Supplies | 3,100.00 |
|
| 6 | Total current assets |
| $26,200.00 |
| 7 | Long-term investments |
| 15,000.00 |
| 8 | Property, plant, and equipment: |
|
|
| 9 | Land | $11,000.00 |
|
| 10 | Building | 175,000.00 |
|
| 11 | Equipment | 233,400.00 |
|
| 12 |
| $419,400.00 |
|
| 13 | Accumulated depreciation | (35,500.00) |
|
| 14 | Net property, plant, and equipment |
| 383,900.00 |
| 15 | Total assets |
| $425,100.00 |
| 16 | LIABILITIES AND EQUITY |
|
|
| 17 | Current liabilities: |
|
|
| 18 | Accounts payable | $12,700.00 |
|
| 19 | Unearned service revenue | 21,800.00 |
|
| 20 | Salaries payable | 4,600.00 |
|
| 21 | Rent payable | 8,200.00 |
|
| 22 | Total current liabilities |
| $47,300.00 |
| 23 | Long-term liabilities: |
|
|
| 24 | Notes payable |
| 95,000.00 |
| 25 | Total liabilities |
| $142,300.00 |
| 26 | Equity: |
|
|
| 27 | Common stock | $300,000.00 |
|
| 28 | Retained earnings | (17,200.00) |
|
| 29 | Total equity |
| 282,800.00 |
| 30 | Total liabilities and equity |
| $425,100.00 |
Additional Information:
| 1. | During 2019, land was purchased for $11,000, a building was purchased for $175,000, and equipment was purchased for $233,400. |
| 2. | Depreciation expense for 2019 was $35,500. |
| 3. | The long-term note was issued for $100,000, and a principal payment of $5,000 was made during 2019. |
| 4. | Common stock was issued for $300,000 cash during 2019. |
| 5. | During 2019, there was a net loss of $17,200, and no dividends were paid. |
| Required: | |
| Prepare a statement of cash flows for 2019. Assume Fleet Limousine uses the indirect method. |
Labels and Amount Descriptions
| Labels | |
| Cash flows from financing activities | |
| Cash flows from investing activities | |
| Cash flows from operating activities | |
| December 31, 2019 | |
| For the year ended December 31, 2019 | |
| Amount Descriptions | |
| Cash, 1/1/2019 | |
| Cash, 12/31/2019 | |
| Decrease in accounts payable | |
| Decrease in accounts receivable | |
| Decrease in rent payable | |
| Decrease in salaries payable | |
| Decrease in supplies | |
| Decrease in unearned service revenue | |
| Depreciation expense | |
| Increase in accounts payable | |
| Increase in accounts receivable | |
| Increase in rent payable | |
| Increase in salaries payable | |
| Increase in supplies | |
| Increase in unearned service revenue | |
| Issuance of common stock | |
| Net cash provided by financing activities | |
| Net cash provided by investing activities | |
| Net cash provided by operating activities | |
| Net cash used for financing activities | |
| Net cash used for investing activities | |
| Net cash used for operating activities | |
| Net decrease in cash | |
| Net income | |
| Net increase in cash | |
| Net loss | |
| Payment on notes payable | |
| Proceeds from issuance of long-term note payable | |
| Purchase of building | |
| Purchase of equipment | |
| Purchase of investments | |
| Purchase of land |
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