Question
Required information Problem 4-5B Record transactions, post to the Cash T-account, and prepare the statement of cash flows (LO4-7) Skip to question [The following information
Required information
Problem 4-5B Record transactions, post to the Cash T-account, and prepare the statement of cash flows (LO4-7)
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[The following information applies to the questions displayed below.]
Peter loves dogs and cats. For the past several years, he has owned and operated Homeward Bound, which temporarily houses pets while their owners go on vacation. For the month of June, the company has the following transactions:
1. | June | 2 | Obtain cash by borrowing $19,000 from the bank by signing a note. | |||
2. | June | 3 | Pay rent for the current month, $1,200. | |||
3. | June | 7 | Provide services to customers, $4,900 for cash and $3,200 on account. | |||
4. | June | 11 | Purchase cages and equipment necessary to maintain the animals, $8,100 cash. | |||
5. | June | 17 | Pay employees salaries for the first half of the month, $6,200. | |||
6. | June | 22 | Pay dividends to stockholders, $1,475. | |||
7. | June | 25 | Receive cash in advance from a customer who wants to house his two dogs (Chance and Shadow) and cat (Sassy) while he goes on vacation the month of July, $1,950. | |||
8. | June | 28 | Pay utilities for the month, $3,000. | |||
9. | June | 30 | Record salaries earned by employees for the second half of the month, $6,200. Payment will be made on July 2. |
Problem 4-5B Part 4
4. Prepare a statement of cash flows for the month of June, properly classifying each of the cash transactions into operating, investing, and financing activities. Assume that the balance of cash at the beginning of June is $14,400. (List cash outflows and decrease in cash as negative amounts. Total entries from the same source together when entering in the statement of cash flows.)
4. Prepare a statement of cash flows for the month of June, properly classifying each of the cash transactions into operating, investing, and financing activities. Assume that the balance of cash at the beginning of June is $14.400. (Llst cash outflows and decrease in cash as negative amounts. Total entries from the same source together when entering in the statement of cash flows.) Answer is complete but not entirely correct. HOMEWARD BOUND Statement of Cash Flows For the month ended June 30 Cash Flows from Operating Activities Cash inflows: From customers $ 7.300 Cash outflows: For rent For utilities OOO (1.200) (6.200) X (3.000) X For salaries S (3.100) Net cash flows from operating activities Cash Flows from Investing Activities Purchase equipment (8.400) (8,400) Net cash flows from investing activities Cash Flows from Financing Activities Borrow from bank Pay dividends 19.000 (1.550) O Net cash flows from financing activities Net increase in cash Cash at the beginning of the month Cash at the end of the month 17,450 5,350 X 14,700 X 20.050 SStep by Step Solution
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