The water fun store is a retailer of water sports products

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Reference no: EM13614083

The Water Fun Store is a retailer of water sports products forbackyard swimming pools. During August, the firm had the followingoperating activities:

August:.

1. Brought $5,000 of goodsfor resale from Pinetree Wholesalers on credit.

5. Paid $450 to the localnewspaper for advertising that ran during July.

6. Paid $975 rent for themonth of August.

9. Sold goods to customersfor $7,350 on credit. These goods had cost the firm $3,600.

10. Paid $3,000 to Pinetree Wholesalers inpartial payment for goods purchased August 1.

11. Collected $5,350 from goods sold onAugust 9.

13. Bought $9,200 of goods for resale fromStanley Company. Paid cash.

16. Paid employees for their work so farin August $1,050.

19. Sold goods to customers on credit for$6,350. These goods had cost the firm $2,400.

25. Collected $3,700 from the sales made onAugust 19.

29. Paid $975 rent for the month ofSeptember.

31. Employees had earned an additional $1,200of wages but would not be paid until September 1.

Required:

A. Prepare a report of net cashflow from operating activities.

B. Prepare an accrual basis income statement.

C. Which statement documents a more realistic or complete picture of August activity? Why?

Reference no: EM13614083

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