Question

	CASH FLOWS
		Instructions:
	1.	Prepare journal entries for the selectedtransactions listed below.
	2.	Based on the account information in the ledger, theselected transactions below,
		and the other financial statements, preparetheStatement of Cash Flows
		for ABC Company for the year ended June 30,2014
	3.	Answer questions A-D.
	1. PREPARE THE JOURNAL ENTRIES.
		Some of ABC Company's January transactions arelisted below. They have been
		already been posted to the ledger.
		Partial list of fiscal year ended June 30, 2014transactions for ABC Company:
		a.	Issued 5,000 shares of $1 par common stock forcash, $50,000
		b.	Sold investment for $35,000 of cash.
		c.	Redeemed $55,000 bonds at face value.
		d.	Declared $4,000 in dividends.
		e.	Recorded depreciation on equipment, $18,500
		f.	Paid $3,500 in cash for dividends
		g.	Purchased equipment for cash, $13,450
		PARTIAL JOURNAL			Debit	Credit
	a.
	b.
	c.
	d.
	e.
	f.
	g.

DO NOT POSTJOURNAL ENTRIES PREPARED IN INSTRUCTION #1 (THEY ARE ALREADYINCLUDED BELOW).
		LEDGER
		Cash #100				Accounts Pay. #200				Service Revenue #500
	7/1/13	42,480					4,900	7/1/13			0	7/1/13
	activity	101,850	62,350			22,800	21,500				106,500
	a.	50,000					3,600	6/30/14			106,500
	b.	35,000
			55,000	c.
			3,500	f.		Dividends Pay. #210				Depreciation Exp. #600
			13,450	g.			700	7/1/13		0		7/1/13
	6/30/14	95,030			f.	3,500	4,000	d.	e.	18,500
							1,200	6/30/14		18,500
		Accounts Rec. #115
	7/1/13	5,000
		50,400	45,750			Bonds Payable #220				RentExpense #603
	6/30/14	9,650					100,000	7/1/13		0		7/1/13
					c.	55,000				24,000
							45,000	6/30/14		24,000
		Supplies #116
	7/1/13	3,660
		3,050	4,160
	6/30/14	2,550				Common Stock #320				Supplies Expense 610
							10,000	7/1/13		0		7/1/13
							5,000	a.		4,160
							15,000	6/30/14		4,160
		Invest. in XYZ Co #120
	7/1/13	20,000
			20,000	b.		PIC in Ex of Par-CS #322				Salaries Expense #620		7/1/13
	6/30/14	0					20,000	7/1/13		0		7/1/13
							45,000	a.		34,000
							65,000	6/30/14		34,000
		Equipment #130
	7/1/13	86,920
	g.	13,450				Retained Earnings #400				Gain on Sale #700
	6/30/134	100,370					13,160	7/1/13			0	7/1/13
											15,000	b.
											15,000
		Accum. Deprec. #131				Cash Dividends #410
			9,300	7/1/13		0		7/1/13
			18,500	e.	d.	4,000
			27,800	6/30/14		4,000
		Before
		158,060	158,060	-
		After
		292,260	292,260	-

FINANCIALSTATEMENTS
ABC Company							ABC Company
Income Statement							Comparative Balance Sheet
For the Year Ended June 30,2014							June 30,
												2014		2013		Amount of		Type of
Revenue:							Assets									Inc/(Dec)		Activity(ies)
	Service revenue			$	106,500		Current assets:
Operating expenses:								Cash			$	95,030	$	42,480	_____		___
	Depreciation Expense	$	18,500					Accounts Receivable				9,650		5,000	_____		___
	Rent Expense		24,000					Supplies				2,550		3,660	_____		___
	Supplies Expense		4,160						Total current assets			107,230		51,140
	Salaries Expense		34,000				Plant Assets:
	Total operating expenses				80,660			Equipment				100,370		86,920	_____		____
Income from operations					25,840			Less:	Accumulated Depreciation			27,800		9,300	_____		____
									Total plant assets			72,570		77,620
Other revenue:							Investments					0		20,000	_____		____
Gain on sale		$	15,000				Total Assets				$	179,800	$	148,760
Total other revenue					15,000
Net income				$	40,840		Liabilities
							Current liabilities:
								Accounts Payable			$	3,600	$	4,900	_____		_____
								Dividends Payable				1,200		700	_____		_____
									Total current liabilities			4,800		5,600
ABC Company							Long-term liabilities:
Statement of RetainedEarnings								Bonds Payable				45,000		100,000	_____		_____
For the Year Ended June 30,2014									Total liabilities			49,800		105,600
Retained earnings, July 1,2013				$	13,160		Stockholders' Equity
Net income		$	40,840				Paid in capital :
Less:	Dividends		4,000					Common Stock, $1 par, 50,000 authorized				15,000		10,000	______		_____
Increase in retainedearnings					36,840			Paid in Capital in Excess of Par				65,000		20,000	______		_____
Retained earnings, June 30,2014				$	50,000				Total paid in capital			80,000		30,000
							Retained Earnings					50,000		13,160	______		_____
									Total stockholders' equity			130,000		43,160
							Total liabilities and stockholders' equity				$	179,800	$	148,760

	2. COMPLETE THE STATEMENT OF CASH FLOWS.
	ABC Company
	Statement of Cash Flows
	For the Year Ended June 30, 2014
	Cash flows from operating activities:
		Net income					$
		Adjustments to reconcile net income to netcash
		flow from operating activities:
							$
			Changes in current operating assets andliabilities:
									$
	Cash flows from investing activities:
							$
		Less:
	Cash flows from financing activities:
							$
		Less:			$
	Cash at beginning of period
	Cash at end of period								$
3. QUESTIONS
A.	If the corporation reported income and expensesusing the cash basis (instead of accrual),
	what impact did operational transactions have oncash?				Increase/Decrease Amount				$
B.	What was the of largest specific source of cashinflow during the year?
C.	What was the largest specific source of cashoutflow during the year?
D.	The ending cash balance on the Statement of CashFlows should match the cash balance
	on which other financial statement?