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Magazine Chapter 1: Q15SE (page 36)
Polk Street Homes had the following cash transactions for the month ended July 31, 2018.
Cash receipts:
Collections from customers $ 25,000
Issued common stock 13,000
Cash payments:
Rent 500
Utilities 2,000
Salaries 1,500
Purchase of equipment 25,000
Payment of cash dividends 4,000
Cash balance, July 1, 2018 14,000
Cash balance, July 31, 2018 19,000
Prepare the statement of cash flows for Polk Street Homes for the month ended
July 31, 2018.
Short Answer
The cash flow statement is shown as follows:
| Polk Street Homes | ||
| Statement of Cash Flows | ||
| Month Ended July 31, 2018 | ||
Cash flows from operating activities: | ||
Receipts: | ||
Collections from customers | $25,000 | |
Payments | ||
To rent | $(500) | |
To utilities | (2,000) | |
To employees | (1,500) | (4,000) |
Net cash provided by operating activities | 21,000 | |
Cash flows from investing activities: | ||
Purchase of equipment | (25,000) | |
Net cash used by investing activities | (25,000) | |
Cash flows from financing activities: | ||
Issued common stock | 13,000 | |
Payment of cash dividend | (4,000) | |
Net cash provided by financing activities | 9,000 | |
Net increase in cash | 5,000 | |
Cash balance, July 1, 2018 | 14,000 | |
Cash balance, July 31, 2018 | $19,000 | |
Step by step solution
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