Respuesta :
Answer:
Explanation:
The preparation of the Cash Flows from three Activities - Direct Method is shown below:
Cash flow from Operating activities
Cash receipts:
Collections from customers $25,000
Less: Cash payments:
Rent -$500
Utilities -$2,000
Salaries -$1,500
Net Cash flow from Operating activities $21,000
Cash flow from Investing activities
Purchase of equipment -$25,000
Net Cash flow from Investing activities -$25,000
Cash flow from Financing activities
Issued common stock $13,000
Less: Payment of cash dividends -$4,000
Net Cash flow from Financing activities $9,000
Net Cash flow from Operating activities $21,000
Net Cash flow from Investing activities -$25,000
Net Cash flow from Financing activities $9,000
Net increase (decrease) in cash for the year is $5,000
Add: Cash balance, July 1, 2018 $14,000
Cash balance, July 31, 2018 $19,000
Cash flow Statement is a statement that shows out flow and in flow of cash & cash equivalents of a company, for a given period of time.
It is categorised in three activities : Operating, Investing, Financing
- Cash flows Operating Activities
Add : Collection from customers 25000
Less : Rent Payment 500
Less : Utilities Payment 2000
Less : Salaries Payment 1500
Net cash from operating activities = 21000 (i)
- Cash flows from Investing Activities
Less : Purchase of Equipment = 25000
Net cash used in Investing Activities = 25000 (ii)
- Cash flows from Financing Activities
Add : Issue of common stock 13000
Less : Payment of Cash Dividends 4000
Net cash flow from Financing Activities = 9000 (iii)
- Net increase in Cash & cash equivalents = (i) + (ii) + (iii) = 21000 - 25000 + 9000 = 5000
Add : Opening value of Cash & cash equivalents = 14000
Closing Value of Cash & Cash equivalents = 19000
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