Question

a summary of cash flows for lindas design services for the year ended december 31 is shown below. cash receipts: cash received from customers $83,490 cash received from additional investment by owner 17,430 cash payments: cash paid for expenses $27,420 cash paid for land 64,850 cash paid for supplies 450 drawing 4,340 cash balance as of january 1 $10,540 prepare a statement of cash flows for lindas design services for the year ended december 31. use the minus sign to indicate cash out flows, cash payments, and decreases in cash. lindas design services statement of cash flows for the year ended december 31 cash flows from operating activities: net cash flow from operating activities cash flows from investing activities: cash flows from financing activities: net cash flow from financing activities net change in cash during year cash as of january 1 cash as of december 31

Explanation:

Step1: Calculate cash flows from operating activities

Cash received from customers is an operating - cash inflow and cash paid for expenses and supplies are operating - cash outflows.
Cash flows from operating activities = Cash received from customers-(Cash paid for expenses + Cash paid for supplies)
= $83490-(27420 + 450)$
= $83490 - 27870$
= $55620$

Step2: Calculate cash flows from investing activities

Cash paid for land is an investing - cash outflow.
Cash flows from investing activities=-$64850$

Step3: Calculate cash flows from financing activities

Cash received from additional investment by owner is a financing - cash inflow and drawing is a financing - cash outflow.
Cash flows from financing activities = Cash received from additional investment by owner - Drawing
= $17430-4340$
= $13090$

Step4: Calculate net change in cash during the year

Net change in cash during the year=Cash flows from operating activities+Cash flows from investing activities+Cash flows from financing activities
= $55620+( - 64850)+13090$
= $55620 - 64850+13090$
= $3860$

Step5: Calculate cash as of December 31

Cash as of December 31 = Cash as of January 1+Net change in cash during the year
= $10540 + 3860$
= $14400$

Answer:

Cash flows from operating activities:
Cash received from customers: $83490$
Cash paid for expenses and supplies: -$27870$
Net cash flow from operating activities: $55620$
Cash flows from investing activities:
Cash paid for land: -$64850$
Cash flows from financing activities:
Cash received from additional investment by owner: $17430$
Drawing: -$4340$
Net cash flow from financing activities: $13090$
Net change in cash during year: $3860$
Cash as of January 1: $10540$
Cash as of December 31: $14400$