Question

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Colton Enterprises experienced the following events for Year 1, the first year of operation:

1. Acquired $38,000 cash from the issue of common stock.
2. Paid $12,300 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2.
3. Performed services for customers on account for $78,000.
4. Incurred operating expenses on account of $36,500.
5. Collected $60,000 cash from accounts receivable.
6. Paid $24,000 cash for salary expense.
7. Paid $29,200 cash as a partial payment on accounts payable.

Adjusting Entries

8. Made the adjusting entry for the expired rent. (See Event 2.)
9. Recorded $3,000 of accrued salaries at the end of Year 1.

Events for Year 2

1. Paid $3,000 cash for the salaries accrued at the end of the prior accounting period.
2. Performed services for cash of $27,000.
3. Purchased $3,100 of supplies on account.
4. Paid $11,400 cash in advance for rent. The payment was for one year beginning April 1, Year 2.
5. Performed services for customers on account for $94,000.
6. Incurred operating expenses on account of $44,500.
7. Collected $92,000 cash from accounts receivable.
8. Paid $42,000 cash as a partial payment on accounts payable.
9. Paid $31,800 cash for salary expense.
10. Paid a $12,000 cash dividend to stockholders.

Adjusting Entries

11. Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid in Year 1.)
12. Recorded supplies expense. A physical count showed that $600 of supplies were still on hand.

please prepare a statement of cash flow's for Year 2

Answer 1

Cash Flow Statement
Direct Method
Year 1
Cash flow from Operating Activities
Paid for rent in advance		$    -12,300.00
Collected cash from customers		$      60,000.00
Paid for salaries		$    -24,000.00
Paid to accounts payable		$    -29,200.00
Cash used in operating activities			$       -5,500.00
Cash flow from Investing Activities
Sale of Equipment		$                    -
Purchase of Equipment		$                    -
Cash used in investing activities			$                     -
Cash flow from Financing Activities
Issue of Common Stock		$      38,000.00
Dividend Paid		$                    -
Cash from financing activities			$      38,000.00
Net Increase in cash			$      32,500.00
Opening Balance of Cash			$                     -
Closing Balance of Cash			$      32,500.00

Cash Flow Statement
Direct Method
Year 2
Cash flow from Operating Activities
Paid for rent in advance		$    -11,400.00
Collected cash from customers		$   1,19,000.00		=27000+92000
Paid for salaries		$    -34,800.00		=-3000-31800
Paid to accounts payable		$    -42,000.00
Cash from operating activities			$      30,800.00
Cash flow from Investing Activities
Sale of Equipment		$                    -
Purchase of Equipment		$                    -
Cash used in investing activities			$                     -
Cash flow from Financing Activities
Issue of Common Stock		$                    -
Dividend Paid		$    -12,000.00
Cash used in financing activities			$     -12,000.00
Net Increase in cash			$      18,800.00
Opening Balance of Cash			$      32,500.00
Closing Balance of Cash			$      51,300.00