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Financial & Managerial Accounting
Found in: Page 40
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Sanyu Sony started a new business and completed these transactions during December.

Dec. 1 Sanyu Sony transferred $65000 cash from a personal savings account to a checking account in the name of Sony Electric in exchange for its common stock.

2 The company rented office space and paid $1000 cash for the December rent.

3 The company purchased $13000 of electrical equipment by paying $4800 cash and agreeing to pay the $8200 balance in 30 days.

5 The company purchased office supplies by paying $800 cash.

6 The company completed electrical work and immediately collected $1200 cash for these services.

8 The company purchased $2530 of office equipment on credit.

15 The company completed electrical work on credit in the amount of $5000.

18 The company purchased $350 of office supplies on credit.

20 The company paid $2530 cash for the office equipment purchased on December 8.

24 The company billed a client $900 for electrical work completed; the balance is due in 30 days.

28 The company received $5000 cash for the work completed on December 15.

29 The company paid the assistant’s salary of $1400 cash for this month.

30 The company paid $540 cash for this month’s utility bill.

31 The company paid $950 cash in dividends to the owner (sole shareholder).

Required 3. Prepare the statement of cash flows for the current month.

The cash flow statement is prepared. The cash flow from operating activities is $3,260, net cash used in investing activities is $8,130 and cash flow from financing activities is $64,050.

See the step by step solution

Step by Step Solution

Computation of cash expense

Preparation of statement of retained earnings

Gram CO.

Statement of cash flow

As of May 31

Particulars

Amount ($)

Amount ($)

Cash flows from operating activities

Cash received from clients

6,200

Cash paid for expenditures

-2,940

Net cash flow from operating activities

3,260

Cash flows from investing activities

Office Supplies purchased

-800

Office equipment purchased

-2,530

Electrical Equipment

-4,800

Net cash used in investing activities

-8,130

Cash flows from financing activities

Common stock issued

65,000

Dividend paid

-950

Net Cash flows from financing activities

64,050

Net increase in cash

59,180

Cash balance, May 1

0

Cash balance, May 31

59,180

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