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 $20,000 from the bank by signing a note. 2. June 3 Pay rent for the current month, $1,000. 3. June 7 Provide services to customers, $4,000 for cash and $2,300 on account. 4. June 11 Purchase cages and equipment necessary to maintain the animals, $7,200 cash. 5. June 17 Pay employees' salaries for the first half of the month, $5,300. 6. June 22 Pay dividends to stockholders, $1,250. 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, $1,500. 8. June 28 Pay utilities for the month, $2,100. 9. June 30 Record salaries earned by employees for the second half of the month, $5,300. Payment will be made on July 2. Please record each transaction & 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 was $13,500.
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 $20,000 from the bank by signing a note. 2. June 3 Pay rent for the current month, $1,000. 3. June 7 Provide services to customers, $4,000 for cash and $2,300 on account. 4. June 11 Purchase cages and equipment necessary to maintain the animals, $7,200 cash. 5. June 17 Pay employees' salaries for the first half of the month, $5,300. 6. June 22 Pay dividends to stockholders, $1,250. 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, $1,500. 8. June 28 Pay utilities for the month, $2,100. 9. June 30 Record salaries earned by employees for the second half of the month, $5,300. Payment will be made on July 2. Please record each transaction & 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 was $13,500.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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 $20,000 from
the bank by signing a note.
2. June 3 Pay rent for the current month, $1,000.
3. June 7 Provide services to customers, $4,000
for cash and $2,300 on account.
4. June 11 Purchase cages and equipment
necessary to maintain the animals, $7,200 cash.
5. June 17 Pay employees' salaries for the first half
of the month, $5,300.
6. June 22 Pay dividends to stockholders, $1,250.
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, $1,500.
8. June 28 Pay utilities for the month, $2,100.
9. June 30 Record salaries earned by employees
for the second half of the month, $5,300. Payment
will be made on July 2.
Please record each transaction & 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 was $13,500.
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