Income Statement

An inexperienced accountant for Prestwick Company prepared the following income statement for the month of August, current year.

PRESTWICK COMPANY AUGUST 31, CURRENT YEAR
Revenues:
Services provided to customers	$17,000
Investment by stockholders	5,000
Loan from bank	15,000	$37,000
Expenses:
Payments to long-term creditors	$11,700
Expenses required to provide services to customers	7,800
Purchase of land	16,000	35,500
Net income		$1,500

Statement of Cash Flows

Prepare a revised income statement in accordance with generally accepted accounting principles.

On the basis of the information for Prestwick Company in Exercise 2.13, prepare a statement of cash flows in a form consistent with generally accepted accounting principles. You may assume all transactions were in cash and that the beginning cash balance was $7,200.