### Larry’s Landscaping, Inc. Starts BusinessOn January 1, 2021, Larry’s Landscaping, Inc. started business. Larry’s Landscaping, Inc. was started by Larry Plant. The start-up business was financed by Larry Plant who invested $10,000 Common Stock of Larry’s Landscaping, Inc. to Larry Plant was the only transaction January 1, 2021.In February 2021, 10 continued to invest in the amounts of the startup of the business, Larry’s Landscaping also issued Common Stock for $50,000 in the lands invested; plus $4,000 of services customers in February. Larry’s Landscaping bought $25,000 equipment needed to operate the business. These assets were not placed into service until March 1; thus there was no mode by providing land scraping for the initial land scrape.In March 2021, Larry’s Landscaping starting operating the business by performing landscaping services for customers.### The following are the Balance Sheets of Larry’s Landscaping, Inc. with the end of the last period and February 28, 2021.**Larry’s Landscaping Balance Sheets***as of the End of January and February 2021*| **Assets** | **February 28, 2021 ($)** | **January 31, 2021 ($)** ||--------------------------------------|---------------------------|--------------------------|| **Current Assets:** | | || Cash | 15,000 | 10,000 || **Total Current Assets** | 15,000 | 10,000 || **Property, Plant & Equipment:** | | || Equipment | 25,000 | || Building | 100,000 | || Land | 50,000 | || **Total Property, Plant & Equipment**| 175,000 | || **Total Assets** | 190,000 | 10,000 || **Liabilities:** | **February 28, 2021 ($)** | **January 31, 2021 ($)** ||--------------------------------------|---------------------------|--------------------------|| Note Payable Long-Term | 100,000 | || **Total Liabilities** | 100,000 | || **Owners’ Equity:** | **February 28, 2021 ($ # Understanding the Statement of Cash Flows: Larry's Landscaping Example## Larry's Landscaping**Statement of Cash Flows (Indirect Method) for the Period February 1 to February 28, 2021**### Cash Flows from Operating Activities- **Net Income:** [Not specified in image]**Cash Provided by Operating Activities**### Cash Flows from Investing Activities[Details not provided in image]**Cash Used by Investing Activities**### Cash Flows from Financing Activities[Details not provided in image]**Cash Provided by Financing Activities**### Increase in Cash from Feb. 1 to Feb. 28, 2021### Beginning Cash Balance February 1, 2021[Details not provided in image]### Increase in Cash from Feb. 1 to Feb. 28, 2021[Details not provided in image]### Ending Cash Balance February 28, 2021[Details not provided in image]---### Understanding the Components:**1. Operating Activities:** These include revenues and expenses calculated from operations during the specified period, like Net Income. Operating activities simply reflect the day-to-day business transactions.**2. Investing Activities:** This section involves purchases and sales of long-term assets and investments. If the company bought or sold equipment or investment properties, it would be recorded here.**3. Financing Activities:** All financial activities related to shareholders and creditors are categorized here. This includes issuing stocks, borrowing, and repaying bank loans.### Visual Explanation:The statement is organized into sections for better understanding the cash flows in different activities:- **Operating Activities** (top portion): Shows the net income and net cash generated from core business operations.- **Investing Activities** (middle portion): Shows cash impacts due to buying or selling of long-term assets.- **Financing Activities** (lower portion): Details cash involved in borrowing funds, repaying loans, and equity transactions.- **Increase in Cash**: Consolidates the net changes or increases in cash over the period from operating, investing, and financing activities.- **Beginning and Ending Cash Balances**: Shows starting and ending cash on hand ensuring a comprehensive financial summary for the period.This format aids in grasping how the company's cash is managed and highlights important areas of financial activity over a given period.---For detailed financial education, ensure to understand how each activity impacts your overall business health and operations.

Cash flow statement is a financial statement which shows all cash inflows and cash outflows of…

Larry's Landscaping, Inc. Starts Business On January 1, 2021, Larry's Landscaping, Inc. started business. Larry's Landscaping was started by Larry Plant. To start the corporation, Larry Plant purchased $10,000 of Larry's Landscaping, Inc. Common Stock. The issuance of Common Stock by Larry's Landscaping, Inc. to Larry Plant was the only transaction in January 2021. In February 2021, to continue the financing of the start-up of the business, Larry's Landscaping issued Common Stock to additional owners and borrowed on a long-term note from the bank. Also in February, Larry's Landscaping invested in various items of Property, Plant, & Equipment needed to operate the business. These items of Property, Plant, & Equipment were not placed into service until March 1; thus there will be no Depreciation recorded in the month of February. In March 2021, Larry's Landscaping starting operating the business by performing landscaping services for customers. The following are the Balance Sheets for Larry's Landscaping as of January 31, 2021 (the end of last period) and February 28, 2021 (the end of this period): Larry's Landscaping Balance Sheets as of the End of January and February 2021 February 28, 2021 January 31, 2021 Assets Cash .. . . $ 15,000 $10,000 Total Current Assets 15,000 10,000 Equipment Building Land .. 25,000 100,000 20,000 Total Property, Plant & Equipment 145,000 Total Assets $160,000 ........ ...... $10.000 Liabilities $100,000 Total Liabilities 100,000 Note Payable Long-Term ... $ Owners' Equity 6,000 54,000 1,000 9,000 10,000 Common Stock Paid-in Capital in Excess of Par Value.. Total Owners' Equity Total Liabilities and Equity $160,000 60,000 $10.000

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q