bear tree services reports the following amounts on december 31, 2024.\nassets\ncash $8,800\nsupplies…
bear tree services reports the following amounts on december 31, 2024.\nassets\ncash $8,800\nsupplies 2,100\nprepaid insurance 3,800\nbuilding 75,000\nliabilities and stockholders’ equity\naccounts payable $16,600\nsalaries payable 3,800\nnotes payable 23,000\ncommon stock 40,000\nretained earnings 11,500\nin addition, the company reported the following cash flows.\ncash inflows\ncustomers $66,000\nborrow from the bank (note) 23,000\nsale of investments 10,600\ncash outflows\nemployee salaries $25,000\nsupplies 6,400\ndividends 8,000\npurchase building 64,400\nrequired:\n1. prepare a balance sheet.\n2. prepare a statement of cash flows.\ncomplete this question by entering your answers in the tabs below.\nbalance sheet\nstatement of cash flows\nprepare a statement of cash flows.\nnote: cash outflows and decreases in cash should be indicated by a minus sign.\nbear tree services\nstatement of cash flows\nfor the year ended december 31, 2024\ncash flows from operating activities
Answer
Explanation:
Step1: Calculate total assets
Total assets = Cash + Supplies+ Prepaid Insurance + Building = $8,800 + 2,100+3,800 + 75,000=$89,700$
Step2: Calculate total liabilities
Total liabilities = Accounts payable+ Salaries payable + Notes payable = $16,600+3,800 + 23,000=$43,400$
Step3: Calculate total stockholders' equity
Total stockholders' equity = Common stock + Retained earnings = $40,000+11,500=$51,500$
Step4: Prepare balance - sheet
| Assets | Amount | Liabilities and Stockholders' Equity | Amount |
|---|---|---|---|
| Cash | $8,800 | Accounts payable | $16,600 |
| Supplies | $2,100 | Salaries payable | $3,800 |
| Prepaid Insurance | $3,800 | Notes payable | $23,000 |
| Building | $75,000 | Common stock | $40,000 |
| Retained earnings | $11,500 | ||
| Total Assets | $89,700 | Total Liabilities and Stockholders' Equity | $89,700 |
Step5: Calculate net cash flow from operating activities
Net cash flow from operating activities = Cash inflows from customers - Cash outflows for employee salaries - Cash outflows for supplies=$66,000 - 25,000-6,400=$34,600$
Step6: Calculate net cash flow from investing activities
Net cash flow from investing activities = Sale of investments - Purchase of building = $10,600-64,400=-$53,800$
Step7: Calculate net cash flow from financing activities
Net cash flow from financing activities = Borrow from the bank - Dividends = $23,000 - 8,000=$15,000$
Step8: Calculate net increase (decrease) in cash
Net increase (decrease) in cash = Net cash flow from operating activities+Net cash flow from investing activities+Net cash flow from financing activities=$34,600-53,800 + 15,000=-$4,200$
Step9: Prepare statement of cash flows
| Cash Flows from Operating Activities | Amount |
|---|---|
| Cash inflows from customers | $66,000 |
| Cash outflows for employee salaries | -$25,000 |
| Cash outflows for supplies | -$6,400 |
| Net cash flow from operating activities | $34,600 |
| Cash Flows from Investing Activities | |
| Sale of investments | $10,600 |
| Purchase of building | -$64,400 |
| Net cash flow from investing activities | -$53,800 |
| Cash Flows from Financing Activities | |
| Borrow from the bank | $23,000 |
| Dividends | -$8,000 |
| Net cash flow from financing activities | $15,000 |
| Net increase (decrease) in cash | -$4,200 |
Answer:
Balance - sheet and statement of cash flows are prepared as above.