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Chapter 1: Q6PSA. (page 39)

Following is selected financial information of Kia Company for the year ended December 31, 2017.

Cash used by investing activities . . . . . . . . . . . . . . . . . $(2,000)

Net increase in cash . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200

Cash used by financing activities . . . . . . . . . . . . . . . . (2,800)

Cash from operating activities . . . . . . . . . . . . . . . . . . . 6,000

Cash, December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . 2,300

Required Prepare the 2017 year-end statement of cash flows for Kia Company

Short Answer

Expert verified

A cash flow statement is a financial statement that reports the movement of cash throughout the business and the closing cash balance is $3,500

Step by step solution

01

Definition of cash flow statement

The financial statement which gives the receipts and payment throughout the year using cash is known as the statement of cash flow.

02

Preparation of cash flow statement

Kia Company
Cash flow statement
December 31, 2017

Amount ($)
Cash from operating activities
6,000
Cash used by investing activities
-2,000
Cash used by financing activities
-2,800
Net Increase in cash
1,200
Cash, December 31, 2016
2,300
Cash, December 31, 2017
3,500

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Most popular questions from this chapter

Ford Motor Company, one of the world’s largest automakers, reports the following income statement accounts for the year ended December 31, 2015 (\( in millions). Use this information to prepare Ford’s income statement for the year ended December 31, 2015.

Selling and administrative costs . . . . . . . . . . . . \) 14,999

Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124,041

Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,558

Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . 3,145

Rivera Roofing Company, owned by Reyna Rivera, began operations in July and completed these transactions during that first month of operations.

July 1 Reyna Rivera invested \(80,000 cash in the company in exchange for its common stock.

2 The company rented office space and paid \)700 cash for the July rent.

3 The company purchased roofing equipment for \(5,000 by paying \)1,000 cash and agreeing to pay the \(4,000 balance in 30 days.

6 The company purchased office supplies for \)600 cash.

8 The company completed work for a customer and immediately collected \(7,600 cash for the work.

10 The company purchased \)2,300 of office equipment on credit.

15 The company completed work for a customer on credit in the amount of \(8,200.

17 The company purchased \)3,100 of office supplies on credit.

23 The company paid \(2,300 cash for the office equipment purchased on July 10.

25 The company billed a customer \)5,000 for work completed; the balance is due in 30 days.

28 The company received \(8,200 cash for the work completed on July 15.

30 The company paid an assistant’s salary of \)1,560 cash for this month.

31 The company paid \(295 cash for this month’s utility bill.

31 The company paid \)1,800 cash in dividends to the owner (sole shareholder).

Required 1. Create the following table similar to the one in Exhibit 1.9.

Use additions and subtractions within the table to show the dollar effects of each transaction on individual items of the accounting equation. Show new balances after each transaction.

Nina Niko launched a new business Niko’s Maintenance Co. that began operations on June 1. The following transactions were completed by the company during that first month.

June

1 Nina Niko invested \(130000 cash in the company in exchange for its common stock.

2 The company rented a furnished office and paid \)6000 cash for June’s rent.

4 The company purchased \(2400 of equipment on credit.

6 The company paid \)1150 cash for this month’s advertising of the opening of the business.

8 The company completed maintenance services for a customer and immediately collected \(850 cash.

14 The company completed \)7500 of maintenance services for City Center on credit.

16 The company paid \(800 cash for an assistant’s salary for the first half of the month.

20 The company received \)7500 cash payment for services completed for City Center on June 14.

21 The company completed \(7900 of maintenance services for Paula’s Beauty Shop on credit.

24 The company completed \)675 of maintenance services for Build-It Coop on credit.

25 The company received \(7900 cash payment from Paula’s Beauty Shop for the work completed on June 21.

26 The company made payment of \)2400 cash for equipment purchased on June 4.

28 The company paid \(800 cash for an assistant’s salary for the second half of this month.

29 The company paid \)4000 cash in dividends to the owner (sole shareholder).

30 The company paid \(150 cash for this month’s telephone bill.

30 The company paid \)890 cash for this month’s utilities.

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

Identify in outline format the three major business activities of an organization. For each of these activities, identify at least two specific transactions or events normally undertaken by the business’s owners or its managers.

Identify the following users as either external users (E) or internal users (I). a. Customers e. Managers i. Controllers b. Suppliers f. District attorney j. FBI and IRS c. Brokers g. Shareholders k. Consumer group d. Business press h. Lenders l. Directors
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