Question

Kay Francis is about to construct her balance sheet and cash flow statement for the year ending 31 December 2018. She has put together the following information:

Kay’s salary	37,000
Reimbursement for travel expenses	1,950
Interest on Savings account	180
Groceries bought	4 150
Rent paid	9,600
Utilities paid	960
Car expenses	650
Tuition, books and supplies outlays	3,300
Books, magazines and periodicals expenses	80
Clothing and other miscellaneous expenditures	2,800
Cost of photographic equipment purchased with credit card	2,200
Amount paid to date on photo equipment	1,600
Travel expenses	1,950
Purchase of a new car (cost)	17,750
Outstanding loan balance on car	7,300
Purchase of bonds	4,900

Using the information provided, prepare a CASH-FLOW statement for the year ending 31 December 2018.

Answer 1

In cashflow statement all the cash that is recevied (Cash Inflow) is added and all the cash payments (Cash Outflow) is reduced to arrive at the closing cash balance.

Cash Flow Statement for the period ended 31 December 2018

Note:- 1. 2,200 being "Cost of photographic equipment purchased with credit card" will not have any impact on cash flow statement since it was not paid in cash but by credi card

2. New car purchase cost 17,750 is finance by bank for 7,300 therefore only the balance amount (17,750-7,300 = 10450) will impact the cashflow statement (cash outflow)