Complete the Statement of Cash Flows below

1)You started your company with $100,000 that you raised by selling stock in Practice Makes

Perfect Inc. to your family and friends.

2. Knowing that you would need additional funds, you presented your business plan to the bank

and were able to get a $50,000 loan at 12%.

3. You purchased three pianos for $16,000 each, paying cash. You believe these pianos will last

four years before you replace them. You expect the salvage value to be zero.

4. You spent $2,000 on supplies (inventory), which you charged on account.

5. The newspaper bills you $500 for the advertisement you ran. You plan on paying the bill next

month.

6. Rent for the space you have leased is $1,000 a month, which you paid.

7. The first month you bill students $2,000 for lessons.

8. You pay your two part-time piano teachers $500 each at the end of the month.

9. One of your students paid the $200 invoice you sent earlier in the month.

10. You write the check for the interest owed for the month.

11. You adjust the supplies (inventory) account for $300 of sheet music that you gave to

students.

12. You record one month of depreciation on the pianos.

Assignment 7 Name

• Indicate if each transaction (Assignment 5 Key) would fall into the operating (“O”), financing (“F”), or investing (“I”) section of the Statement of Cash Flows. If this is not applicable to the transaction, mark the transaction with an “X”.

1. _______

2. _______

3. _______

4. _______

5. _______

6. _______

7. _______

8. _______

9. _______

10. _______

11. _______

12. _______

• Complete the Statement of Cash Flows below (using the Assignment 5 Key).

Cash flow from operating activities

Net cash flow from operating activities

Cash flow from investing activities

Net cash flow from investing activities

Cash flow from financing activities

Net cash flow from financing activities

Net cash change

Beginning cash

Ending cash

Assignment 5 Transaction Ledger Name

ü/û #

A = L + E

1

2

3

4

5

6

7

8

9

10

11

12

commoncashflow notes

stocktook cash

50K equipment

payable 50K

48K cash 48K

inventory accounts

2K payable 124 advertisingacarids expense 500

cash 1K rent expense 1K

fffeffftfetzk revenue zr cash.lk wage cash two

expense 1K accounts200receivable

cash 500 interest expense

500

inventory COGS 300