Reference no: EM13941084
USING A SPREADSHEET TO PREPARE A STATEMENT OF CASH FLOWS
Fleet Limousine Service Inc. began operations in late March 2009. At the end of 2009, the following balance sheet was prepared for Fleet.
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Fleet Limousine Service Inc.
Balance Sheets December 31, 2009
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ASSETS
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Current assets: Cash
Accounts receivable Supplies inventory
Total current assets Long-term investments
Property, plant, and equipment: Land
Building Equipment
Accumulated depreciation
Net property, plant, and equipment Total assets
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$ 7,200
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15,900
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3,100
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$ 26,200
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15,000
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$ 11,000
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175,000
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233,400
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$419,400
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(35,500)
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383,900
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$425,100
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LIABILITIES AND EQUITY
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Current liabilities: Accounts payable Unearned revenue Salaries payable Rent payable
Total current liabilities Long-term liabilities:
Long-term notes payable Total liabilities
Equity:
Common stock Retained earnings
Total equity
Total liabilities and equity
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$ 12,700
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21,800
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4,600
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8,200
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$ 47,300
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95,000
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$142,300
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$300,000
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(17,200)
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282,800
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$425,100
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Additional information:
a. During 2009, land was purchased for $11,000, a building was purchased for $175,000, and equipment was purchased for $233,400.
b. Depreciation expense for 2009 was $35,500.
c. The long-term note was issued for $100,000, and a principal payment of $5,000 was made during 2009.
d. Common stock was issued for $300,000 cash during 2009.
e. During 2009, there was a net loss of 17,200 and no dividends were paid.
Required:
1. Using a spreadsheet, prepare a statement of cash flows for 2009. Assume Fleet Limousine uses the indirect method.
2. Discuss whether Fleet Limousine appears to have matched the timing of inflows and outflows of cash.