A summary of cash flows for Sentinel Travel Service for the year ended August 31, 2014

A summary of cash flows for Sentinel Travel Service for the year ended August 31, 2014,
is shown below.


Cash receipts:
Cash received from customers $734,000
Cash received from additional investment of owner 36,000
Cash payments:
Cash paid for operating expenses 745,600
Cash paid for land 50,000
Cash paid to owner for personal use 18,000


The cash balance as of September 1, 2013, was $89,000.

Prepare a statement of cash flows for Sentinel Travel Service for the year ended August 31, 2014.


Answer:

SENTINEL TRAVEL SERVICE
Statement of Cash Flows
For the Year Ended August 31, 2014
Cash flows from operating activities:
Cash received from customers $ 734,000
Deduct cash payments for operating expenses (745,600)
Net cash flows used for operating activities $(11,600)
Cash flows used for investing activities:
Cash payments for purchase of land (50,000)
Cash flows from financing activities:
Cash received from owner as investment $ 36,000
Deduct cash withdrawals by owner (18,000)
Net cash flows from financing activities 18,000
Net decrease in cash during year $(43,600)
Cash as of September 1, 2013 89,000
Cash as of August 31, 2014 $ 45,400