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Statement of Cash Flows and Balance Sheet

Construct the cash from operating activities section of the SCF. See attached file for full problem description.

The Bogue Street Hotel's current account balances at the beginning and end of the year were as follow:
Current Assets Beg. End Current Liabilities Beg. End
Cash $10,000 $15,000 Accounts payable $52,000 $60,000
Accounts receivable 100000 90000 Wages payable 10500 12000
Food inventory 20000 25000 Interest payable 9000 7500
Prepaid expenses 5000 6000 Taxes payable 5400 7500
Total $135,000 $136,000 Total $76,900 $87,000

In addition, the hotel had total revenue of $3500800, expenses of $2900400, and depreciation of $75200 during the year.

REQUIRE
Construct the cash from operating activities section of the SCF.
Statement of Cash Flows
For the month of December 31, 2002
Cash flows from operating activities
Collection from guests $100,000
Payments for salaries -35000
Payments for other expenses -48000
Net cash provided by operating activities $17,000
Cash flows from investing activities
Sale of equipment $3,500
Purchase of investments -24000
Net cash used by investing activities -20500
Cash flows from financing activities
Issue of long-term notes $10,000
Owner withdrawals -8000
Net cash from financing activities 2000
Net decrease in cash ($1,500)

Additional Information
1. Net income for December 2002 equaled $13500.
2. Depreciation expense for December 2002 on equipment $5500.
3. A December 2002 gain on the sale equipment $2000; accumulatee depreciation on equipment sold, $3000.

REQUIRE
Based on the above data, prepare the December 31, 2002 balance sheet for Nathan's Motel.

Attachments

Solution Preview

The Bogue Street Hotel's current account balances at the beginning and end of the year were as follow:
Current Assets Beg. End Current Liabilities
Cash $10,000 $15,000 Accounts payable
Accounts receivable 100000 90000 Wages payable
Food inventory 20000 25000 Interest payable
Prepaid expenses 5000 6000 Taxes payable
Total $135,000 $136,000 Total

In addition, the hotel had total revenue of $3500800, expenses of $2900400, and depreciation of $75200 during the year.

REQUIRE
Construct the cash from operating activities section of the SCF.

Statement of cash Flows
Cash Flow from operating activities
Net Income 525,200 From the details of revenue, expenses and depreciation
Add: Depreciation 75,200
Add: Decrease in ...

Solution Summary

The solution has two problems - preparing the operating activity section of statement of cash flows and preparation of balance sheet given the statement of cash flows

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