Question

Prepare the Statement of Cash Flows for Smart Touch Learning for the month ended December 31, 2016 from the provided information. Within each section of the statement, use the drop-down menus to enter the accounts. Then enter the account balances and calculate ending balances. Enter decreases in cash with a minus sign or parentheses.

Cash balance, December 1, 2016 is $18,100
Transactions
Dec. 1 Common stock was issued to stockholders for $8,100 cash.
7 Purchased equipment for $1,800 on account.
14 Paid $20,100 cash for land.
17 Paid cash expenses: office rent, $1,400; employees' salaries, $1,200; utilities, $400.
23 Paid cash dividends of $2,400.
26 Earned service revenue for the month, $4,900, receiving cash.

Answer 1

To prepare the Statement of Cash Flows for Smart Touch Learning for the month ended December 31, 2016, we will organize the cash flows into three sections: Operating Activities, Investing Activities, and Financing Activities.

Here's how the cash flows will be reported based on the provided transactions:

### Smart Touch Learning
### Statement of Cash Flows
### For the Month Ended December 31, 2016

#### Cash Flows from Operating Activities:
- Cash received from customers (Service Revenue): $4,900
- Cash paid for office rent: ($1,400)
- Cash paid for employees' salaries: ($1,200)
- Cash paid for utilities: ($400)
- Cash paid for dividends: ($2,400)

**Net Cash Provided by Operating Activities:**
\[
4,900 - 1,400 - 1,200 - 400 - 2,400 = -500
\]

#### Cash Flows from Investing Activities:
- Purchased equipment: ($1,800)
- Cash paid for land: ($20,100)

**Net Cash Used in Investing Activities:**
\[
-1,800 - 20,100 = -21,900
\]

#### Cash Flows from Financing Activities:
- Issuance of common stock: $8,100

**Net Cash Provided by Financing Activities:**
\[
8,100
\]

#### Net Increase (Decrease) in Cash:
\[
Net Cash from Operating Activities + Net Cash from Investing Activities + Net Cash from Financing Activities
\]
\[
-500 - 21,900 + 8,100 = -14,300
\]

#### Cash Balance:
- Cash balance at beginning (December 1, 2016): $18,100
- Net decrease in cash: ($14,300)

**Ending Cash Balance (December 31, 2016):**
\[
18,100 - 14,300 = 3,800
\]

### Summary of Cash Flows:
- **Net Cash Provided by Operating Activities:** ($500)
- **Net Cash Used in Investing Activities:** ($21,900)
- **Net Cash Provided by Financing Activities:** $8,100
- **Net Decrease in Cash:** ($14,300)
- **Ending Cash Balance:** $3,800

### Final Statement:

```
Smart Touch Learning
Statement of Cash Flows
For the Month Ended December 31, 2016

Cash Flows from Operating Activities:
Cash received from customers $4,900
Cash paid for office rent ($1,400)
Cash paid for employees' salaries ($1,200)
Cash paid for utilities ($400)
Cash paid for dividends ($2,400)
-------------------------------------------------------
Net Cash Provided by Operating Activities ($500)

Cash Flows from Investing Activities:
Purchase of equipment ($1,800)
Cash paid for land ($20,100)
-------------------------------------------------------
Net Cash Used in Investing Activities ($21,900)

Cash Flows from Financing Activities:
Issuance of common stock $8,100
-------------------------------------------------------
Net Cash Provided by Financing Activities $8,100

Net Increase (Decrease) in Cash ($14,300)

Cash Balance, December 1, 2016 $18,100
-------------------------------------------------------
Ending Cash Balance, December 31, 2016 $3,800
```

This is the completed Statement of Cash Flows for Smart Touch Learning for the month ended December 31, 2016.