A summary of cash flows for Sunset Travel Service for the year ended April 30, 2014, is shown below.

A summary of cash flows for Sunset Travel Service for the year ended April 30, 2014, is shown below.


Cash receipts:
Cash received from customers $1,500,000
Cash received from additional investment of owner 75,000
Cash payments:
Cash paid for operating expenses 1,215,000
Cash paid for land 240,000
Cash paid to owner for personal use 66,000


The cash balance as of May 1, 2013, was $220,000.

Prepare a statement of cash flows for Sunset Travel Service for the year ended April 30, 2014.


Answer:

SUNSET TRAVEL SERVICE
Statement of Cash Flows
For the Year Ended April 30, 2014
Cash flows from operating activities:
Cash received from customers $ 1,500,000
Deduct cash payments for operating expenses (1,215,000)
Net cash flows from operating activities $ 285,000
Cash flows used for investing activities:
Cash payments for purchase of land (240,000)
Cash flows from financing activities:
Cash received from owner as investment $ 75,000
Deduct cash withdrawals by owner (66,000)
Net cash flows from financing activities 9,000
Net increase in cash during year $ 54,000
Cash as of May 1, 2013 220,000
Cash as of April 30, 2014 $ 274,000

Using the following data for Sunset Travel Service as well as the statement of owner’s equity shown

Using the following data for Sunset Travel Service as well as the statement of owner’s equity shown in Practice Exercise 1-5A, prepare a balance sheet as of April 30, 2014.


Accounts payable $ 61,000
Accounts receivable 124,000
Cash 274,000
Land 450,000
Supplies 13,000




Answer:

SUNSET TRAVEL SERVICE
Balance Sheet
April 30, 2014
Assets Liabilities
Cash $274,000 Accounts payable $ 61,000
Accounts receivable 124,000
Supplies 13,000 Owner’s Equity
Land 450,000 Craig Daws, capital 800,000
Total liabilities and
Total assets $861,000 owner’s equity $861,000

The revenues and expenses of Sunset Travel Service for the year ended April 30, 2014, are listed below

The revenues and expenses of Sunset Travel Service for the year ended April 30, 2014, are listed below.


Fees earned $1,673,000
Office expense 488,000
Miscellaneous expense 34,000
Wages expense 660,000



Prepare an income statement for the current year ended April 30, 2014.


Answer:

SUNSET TRAVEL SERVICE
Income Statement
For the Year Ended April 30, 2014
Fees earned $1,673,000
Expenses:
Wages expense $660,000
Office expense 488,000
Miscellaneous expense 34,000
Total expenses 1,182,000
Net income $ 491,000