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# Statement of cash flows

The cash account for Presley Corporation shows the following for the year ended December 31,2006.

Beginning cash balance . . . . . . . . . . \$ ?
Cash receipts during year from:
Services . . . . . . . . . . . . . . . . . . . . . 2,214,000
Investments by owners . . . . . . . . . 93,000
Sale of land . . . . . . . . . . . . . . . . . . 194,000
Cash payments during year for:
Operating expenses . . . . . . . . . . . . 1,735,000
Taxes . . . . . . . . . . . . . . . . . . . . . . 207,000
Purchase of building . . . . . . . . . . . 352,000
Distributions to owners . . . . . . . . . 68,000
Ending cash balance . . . . . . . . . . . . . 815,000

Required:
Prepare a statement of cash flows for Presley Corporation for the year ended December 31,2006.

#### Solution Preview

The statement of cash flows is composed of three sections - operating section, investment section and financing section. Operating section has all items related to the operations. Investment section has investments in fixed assets, securities etc (purchase and sale) and the financing section deals with debt and equity borrowing or repayment and dividends

In this question, we are given all the cash flows and we only need to put them in respective sections
Cash receipts during year from:
Services . . . . . . . . . . . . . . . . . . . . . 2,214,000 ...

#### Solution Summary

The solution explains the preparation of a statement of cash flows for Presley Corporation.

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