Preparing a Statement of Cash Flows Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. a. Invested cash in the business, $5,000. b. Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments. c. Paid office rent, $400. d. Received cash for services rendered, $700. e. Paid phone bill, $95. f. Received cash for services rendered, $600. g. Made payment on loan in transaction (b), $500. h. Paid wages to part-time employee, $800. i. Paid electricity bill, $100. j. Withdrew cash for personal use, $500. k. Paid wages to part-time employee, $600. Required: 1. Prepare a statement of cash flows based on the transactions reported. Use a minus sign to indicate cash outflows, cash payments or decreases in cash. Bob Jacobs Advertising Agency Statement of Cash Flows For Month Ended January 31, 20-- Cash flows from operating activities: Cash received from clients v Cash paid for rent v 400 X Cash paid for phone 95 Cash paid for wages 800 X Cash paid for electricity v Total cash paid for operations Net cash used for operating activities Cash flows from investing activities: Cash paid for office equipment v 2,500 X Net cash used for investing activities Cash flows from financing activities: Cash investment by owner v 5,000 Cash withdrawal by owner v 2,500 X Payment made on loan 2,500 X Net cash provided by financing activities Net increase in cash
Preparing a Statement of Cash Flows Bob Jacobs opened an advertising agency. The following transactions occurred during January of the current year. a. Invested cash in the business, $5,000. b. Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly installments. c. Paid office rent, $400. d. Received cash for services rendered, $700. e. Paid phone bill, $95. f. Received cash for services rendered, $600. g. Made payment on loan in transaction (b), $500. h. Paid wages to part-time employee, $800. i. Paid electricity bill, $100. j. Withdrew cash for personal use, $500. k. Paid wages to part-time employee, $600. Required: 1. Prepare a statement of cash flows based on the transactions reported. Use a minus sign to indicate cash outflows, cash payments or decreases in cash. Bob Jacobs Advertising Agency Statement of Cash Flows For Month Ended January 31, 20-- Cash flows from operating activities: Cash received from clients v Cash paid for rent v 400 X Cash paid for phone 95 Cash paid for wages 800 X Cash paid for electricity v Total cash paid for operations Net cash used for operating activities Cash flows from investing activities: Cash paid for office equipment v 2,500 X Net cash used for investing activities Cash flows from financing activities: Cash investment by owner v 5,000 Cash withdrawal by owner v 2,500 X Payment made on loan 2,500 X Net cash provided by financing activities Net increase in cash
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Preparing a Statement of Cash Flows
Bob Jacobs opened an advertising agency. The following transactions occurred during January of the
current year.
a. Invested cash in the business, $5,000.
b. Purchased office equipment. Paid $2,500 cash and agreed to pay the balance of $2,000 in four monthly
installments.
c. Paid office rent, $400.
d. Received cash for services rendered, $700.
e. Paid phone bill, $95.
f. Received cash for services rendered, $600.
g. Made payment on loan in transaction (b), $500.
h. Paid wages to part-time employee, $800.
i. Paid electricity bill, $100.
j. Withdrew cash for personal use, $500.
k. Paid wages to part-time employee, $600.
Required:
1. Prepare a statement of cash flows based on the transactions reported. Use a minus sign to indicate cash
outflows, cash payments or decreases in cash.
Bob Jacobs Advertising Agency
Statement of Cash Flows
For Month Ended January 31, 20--
Cash flows from operating activities:
Cash received from clients v
Cash paid for rent
400 X
Cash paid for phone
95 X
Cash paid for wages
800
Cash paid for electricity
100 X
Total cash paid for operations
Net cash used for operating activities
Cash flows from investing activities:
Cash paid for office equipment v
2,500 X
Net cash used for investing activities
Cash flows from financing activities:
Cash investment by owner
5,000 V
Cash withdrawal by owner
2,500
Payment made on loan
2,500 X
Net cash provided by financing activities
Net increase in cash
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