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The following transactions pertain to Smith Training Company for Year 1:

Jan.	30		Established the business when it acquired $54,000 cash from the issue of common stock.
Feb.	1		Paid rent for office space for two years, $16,200 cash.
Apr.	10		Purchased $740 of supplies on account.
July	1		Received $27,500 cash in advance for services to be provided over the next year.
	20		Paid $555 of the accounts payable from April 10.
Aug.	15		Billed a customer $10,000 for services provided during August.
Sept.	15		Completed a job and received $3,000 cash for services rendered.
Oct.	1		Paid employee salaries of $33,500 cash.
	15		Received $9,300 cash from accounts receivable.
Nov.	16		Billed customers $36,500 for services rendered on account.
Dec.	1		Paid a dividend of $700 cash to the stockholders.
	31		Adjusted records to recognize the services provided on the contract of July 1.
	31		Recorded $2,150 of accrued salaries as of December 31.
	31		Recorded the rent expense for the year. (See February 1.)
	31		Physically counted supplies; $90 was on hand at the end of the period.

d. Prepare the statement of cash flows for Year 1. (Round your final answers to the nearest whole dollar amount. Statement of Cash Flows only, items to be deducted must be indicated with a negative amount.)

Answer 1

Cash flow statement to be made as under:

Smith Training Company
Statement of Cash flows
For the year 1
Particulars	Amount	Amount
Cash flow from operating activities
Advance for services to be provided over the next year		$          27,500
Cash received from customers		$          12,300
Less: Cash Paid for
Rent for office space	$          (16,200)
Supplies	$                (555)
Salaries	$          (33,500)	$        (50,255)
Net cash provided by operating activities		$        (10,455)
Cash flow from investing activities
Net cash provided by investing activities		$                   -
Cash flow from financing activities
Proceeds from issue of common stock		$          54,000
Dividend paid on common stock		$              (700)
Net cash provided by financing activities		$          53,300
Net increase / (decrease) in cash		$          42,845
Cash balance at the beginning of the year		$                   -
Cash balance at the end of the year		$          42,845

Explanation with transaction list:

Date		Transaction	Treatment in cash flow
Jan.	30	Established the business when it acquired $54,000 cash from the issue of common stock.	Shown under Cash flow from financing activities
Feb.	1	Paid rent for office space for two years, $16,200 cash.	Shown under Cash flow from operating activities-cash paid for rent
Apr.	10	Purchased $740 of supplies on account.	No cash inflow/outflow hence no effech on cash flow statement
July	1	Received $27,500 cash in advance for services to be provided over the next year.	Shown under Cash flow from operating activities- Advance received
	20	Paid $555 of the accounts payable from April 10.	Shown under Cash flow from operating activities-cash paid for supplies
Aug.	15	Billed a customer $10,000 for services provided during August.	No cash inflow/outflow hence no effech on cash flow statement
Sept.	15	Completed a job and received $3,000 cash for services rendered.	Shown under Cash flow from operating activities- cash received from customer
Oct.	1	Paid employee salaries of $33,500 cash.	Shown under Cash flow from operating activities-cash paid for salaries
	15	Received $9,300 cash from accounts receivable.	Shown under Cash flow from operating activities- cash received from customer
Nov.	16	Billed customers $36,500 for services rendered on account.	No cash inflow/outflow hence no effech on cash flow statement
Dec.	1	Paid a dividend of $700 cash to the stockholders.	Shown under Cash flow from financing activities- dividends paid
	31	Adjusted records to recognize the services provided on the contract of July 1.	No cash inflow/outflow hence no effech on cash flow statement
	31	Recorded $2,150 of accrued salaries as of December 31.	No cash inflow/outflow hence no effech on cash flow statement
	31	Recorded the rent expense for the year. (See February 1.)	No cash inflow/outflow hence no effech on cash flow statement
	31	Physically counted supplies; $90 was on hand at the end of the period.	No cash inflow/outflow hence no effech on cash flow statement