Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Sign up and see all textbooks for free! Illustration


Horngren'S Financial And Managerial Accounting
Found in: Page 36

Answers without the blur.

Just sign up for free and you're in.


Short Answer

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.

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:


Collections from customers



To rent


To utilities


To employees



Net cash provided by operating activities


Cash flows from investing activities:

Purchase of equipment


Net cash used by investing activities


Cash flows from financing activities:

Issued common stock


Payment of cash dividend


Net cash provided by financing activities


Net increase in cash


Cash balance, July 1, 2018


Cash balance, July 31, 2018


See the step by step solution

Step by Step Solution

Step 1: Explanation on Statement of Cash Flows

It is the part of the financial statements, which reports the net change in the cash balance of the business, by recording all cash transactions for the period.

Step 2: Statement of cash flows

Cash flow from operating activities equals $21,000, cash flow from financing activities equals ($25,000), cash flow from financing activities equals $9,000 and net increase in cash equals $5,000.

Most popular questions for Business-studies Textbooks

Abby Perry recently opened her own law office on December 1, which she operates as a corporation. The name of the new entity is Abby Perry, Attorney. Perry experienced the following events during the organizing phase of the new business and its first month of operation, December 2018. Some of the events were personal and did not affect the law practice. Others were business transactions and should be accounted for by the business. Dec. 1 Sold personal investment in Nike stock, which she had owned for several years, receiving $30,000 cash. 2 Deposited the $30,000 cash from the sale of the Nike stock in her personal bank account. 3 Deposited $89,000 cash in a new business bank account titled Abby Perry, Attorney. The business issued common stock to Perry. 5 Paid $600 cash for ink cartridges for the printer. 7 Purchased computer for the law office, agreeing to pay the account, $8,000, within three months. 9 Received $2,900 cash from customers for services rendered. 15 Received bill from The Lawyer for magazine subscription, $300. (Use Miscellaneous Expense account.) 23 Finished court hearings on behalf of a client and submitted a bill for legal services, $8,000, on account. 28 Paid bill from The Lawyer. 30 Paid utilities, $900. 31 Received $2,800 cash from clients billed on Dec. 23. 31 Cash dividends of $3,000 were paid to stockholders. Requirements 1. Analyze the effects of the preceding events on the accounting equation of Abby Perry, Attorney. Use a format similar to Exhibit 1-6. 2. Prepare the following financial statements: a. Income statement. b. Statement of retained earnings. c. Balance sheet. d. Statement of cash flows


Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.