Question

A summary of cash flows for Ousel Travel Service for the year ended November 30, 2016, follows. The cash balance as of December 1, 2015, was $203,000.

Cash Flows
Cash receipts:
Cash received from customers	$1,465,000
Cash received from additional investment of owner	50,000
Cash payments:
Cash paid for operating expenses	1,230,000
Cash paid for land	150,000
Cash paid to owner for personal use	30,000

Prepare a statement of cash flows for Ousel Travel Service for the year ended November 30, 2016. Refer to the cash receipts and cash payments information given in the instructions and to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) and the word “Deduct” will automatically appear if they are required. Enter amounts that represent cash outflows as negative numbers using a minus sign.

Labels
Cash flows from financing activities
Cash flows from investing activities
Cash flows from operating activities
For the Year Ended November 30, 2016
Amount Descriptions
Cash as of December 1, 2015
Cash as of November 30, 2016
Net cash flows from financing activities
Net cash flows from investing activities
Net cash flows from operating activities
Net cash flows used for financing activities
Net cash flows used for investing activities
Net cash flows used for operating activities
Net decrease in cash during year
Net increase in cash during year repare a statement of cash flows for Ousel Travel Service for the year ended November 30, 2016. Refer to the cash receipts and cash payments information given in the instructions and to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) and the word “Deduct” will automatically appear if they are required. Enter amounts that represent cash outflows as negative numbers using a minus sign. Score: 70/98 Ousel Travel Service Statement of Cash Flows

Answer 1

Ousel Travel Service

Statement of Cash Flows

For the Year Ended November 30, 2016 (Amount in $)

Cash flows from operating activities
Cash received from customers	1,465,000
Cash paid for operating expenses	-1,230,000
Net cash flows from operating activities (A)	235,000
Cash flows from investing activities
Cash paid for land	-150,000
Net cash flows used for investing activities (B)	-150,000
Cash flows from financing activities
Cash received from additional investment of owner	50,000
Cash paid to owner for personal use	-30,000
Net cash flows from financing activities (C)	20,000
Net increase in cash during year (A+B+C)	105,000
Add: Cash as of December 1, 2015	203,000
Cash as of November 30, 2016	308,000

Working notes:-

1) The cash received from customers and cash paid for operating expenses will be shown as a cash flows from operating activities and cash paid for land is an investing activity, therefore will be shown as a cash flow from investing activity.

2) The cash received from additional investment of owner will result in increase in owner's capital and will be shown as a cash flow from financing activities. Similarly, cash paid to owner for personal use will result in decrease in owner's capital and will also shown as a cash flow from financing activities.