In: Accounting
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 |
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Revenues: | |||
Services provided to customers | $17,000 | ||
Investment by stockholders | 5,000 | ||
Loan from bank | 15,000 | $37,000 | |
Expenses: |
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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.