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Income Statement An inexperienced accountant for Prestwick Company prepared the following income statement for the month...

Income Statement

An inexperienced accountant for Prestwick Company prepared the following income statement for the month of August, current year.

PRESTWICK COMPANY
AUGUST 31, CURRENT YEAR
Revenues:
 Services provided to customers $17,000
 Investment by stockholders 5,000
 Loan from bank  15,000 $37,000

Expenses:
 Payments to long-term creditors $11,700
 Expenses required to provide   services to customers 7,800
 Purchase of land  16,000   35,500

Net income

 $  1,500

Statement of Cash Flows

Prepare a revised income statement in accordance with generally accepted accounting principles.

On the basis of the information for Prestwick Company in Exercise 2.13, prepare a statement of cash flows in a form consistent with generally accepted accounting principles. You may assume all transactions were in cash and that the beginning cash balance was $7,200.

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ekkarill92 answered 2 years ago
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