Preparation of statement of cash flow statement using direct method
San Garza Properties has been in business for many years. On December 31, 2006, the firm's cash balance was $9,121. During January of 2007, the 14 events on the following page were recorded in the company's accounting system.
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Assets
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=
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Liabilities
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+
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Owner's Equity
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Date
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Accounts
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Cash
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Other Assets
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Contributed Capital
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Retained Earnings
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1
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Cash
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18,000
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18,000
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Bank Loan Payable
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2
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Rent Expense
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Cash
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(3000)
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(3000)
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3
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Office Furniture
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5,500
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Cash
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(5,500)
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4
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Merchandise
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9,000
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Accounts Payable
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9,000
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5
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Cash
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10,000
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Common stock
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10,000
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6
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Adverting Receivable
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(2,200)
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Cash
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(2,200)
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7
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Accounts Receivable
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18,000
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Sales Revenue
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18,000
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8
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Merchandise
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(7,500)
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Costs of Goods Sold
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(7,500)
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9
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Cash
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8,100
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Accounts Receivable
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(8,100)
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10
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Accounts Payable
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(7,000)
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Cash
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(7,000)
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11
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Computer Equipment
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4,800
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Cash
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(4,800)
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12
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Wages Expense
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(1,400)
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Wages Payable
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1,400
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13
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Dividends
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(2,000)
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Cash
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(2,000)
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14
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Bank Loan Payable
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(5,000)
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Interest Expense
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Cash
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(5,135)
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(135)
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Ending Amounts
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$6,465
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$21,700
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=
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$16,400
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$10,000
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$1,765
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Required:
Prepare a statement of cash flows for the month of January 2007. Use good form and the direct format.