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Statement of cash flows; solve for beginning cash amount

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8. 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.

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Solution Summary

The solution presents the steps required to prepare cash flow statement for the problem solution. The steps explain the process and the statement of cash flows is prepared in proper format for Presley Corporation.

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Notes regarding problem:

1. The assumption is made that all amounts are cash basis (paid and received) so there are no adjustments required to bring the statement to a cash basis.
2. The income statement had to be computed before the Statement of cash flows could be prepared.
3. When ...

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