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n inexperienced accountant for Prestwick Company prepared the following income statement for the month of August,...

n inexperienced accountant for Prestwick Company prepared the following income statement for the month of August, current year.

PRESTWICK COMPANY
AUGUST 31, CURRENT YEAR
Revenues:
Services provided to customers $ 13,000
Investment by stockholders 3,700
Loan from bank 14,000 $ 30,700
Expenses:
Payments to long-term creditors $ 13,000
Expenses required to provide services to customers 9,300
Purchase of land 17,000 39,300
Net income $ 8,600

Based on the information prepare a statement of cash flows in a form consistent with generally accepted accounting principles. You may assume all transactions were in cash and that the beginning cash balance was $12,800. (List any deduction in cash and cash outflows as negative amounts.) inexperienced accountant for Prestwick Company prepared the following income statement for the month of August, current year.

PRESTWICK COMPANY
Statement of Cash Flows
For the Month Ended August 31, Current Year
Cash flows from operating activities:
0
Cash flows from investing activities:
0
Cash flows from financing activities:
$0
Cash balance, August 1, Current Year
Cash balance, August 31, Current Year $0
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Answer #1
PRESTWICK COMPANY
Statement of Cash Flows
For the Month Ended August 31, Current Year
Cash flows from operating activities:
Services provided to customers $13,000
Expenses required to provide services to customers ($9,300)
Net cash provided by Operating activities $3,700
Cash flows from investing activities:
Purchase of land ($17,000)
Net Cash used by investing activities ($17,000)
Cash flows from financing activities:
Investment by stockholder's $3,700
Loan from bank $14,000
Payment to long term creditors ($13,000)
Net Cash provided by financing activities $4,700
Net Increase (Decrease) in Cash ($8,600)
Cash balance, August 1, Current Year $12,800
Cash balance, August 31, Current Year $4,200
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