The Water Fun Store is a retailer of water sports products forbackyard swimming pools, During August; the Firm had the followingoperating activities:
Aug 1 Bought 5,000 of goods for resale from Pine treewholesalers on credit.
Aug 5 Paid 450 to the local newspaper for advertising that randuring July.
Aug 6 Paid 975 rent for the month of August.
Aug 9 sold goods to customers for 7,300 on credit. Thesegoods had cost the firm 3,600.
Aug 10 Paid 3,000 to Pine tree Wholesalers in partial paymentfor goods purchased August 1.
Aug 11 Collected 5,350 from goods sold on August 9.
Aug 13 Bought 9,200 of goods for resale from StanleyCompany. Paid cash.
Aug 16 Paid employees for their work so far in August, 1,050
Aug 19 Sold goods to customers on credit for6,350. These goods had cost the firm 2,400.
Aug 25 Collected 3,700 from the sales made on August19.
Aug 29 Paid 975 rent for the month of September.
Aug 31 Employees had earned an additional 1,200 of wages butwould not be paid until September 1.
A. Prepare a report of net cash flow from operating activities.
B. Prepare an accrual basis income statement.
C. Which statement documents a more realistic or completepicture of Augusts activity? Why?