1) During 2008, land was purchased for $11, 000, a building was purchased for $1

Question

1) During 2008, land was purchased for $11, 000, a building was purchased for $175,000 and equipment was purchased for $233,400.

2) Depreciation eexpense for 2008 was $35,500.

3) The long term note was issued for $100,000 and a principal payment of $5,000 was made during 2008.

4) Common stock was issued for $300,000 cash during 2008.

5) During 2008 there was a net loss of $32,200, and no dividends were paid.

Required: Prepare a statement of cash flowws for Fleet Limousine, using the indirect method to determine cash from operations.

(First year statement of cash flows). Fleet Limousine Service Inc., began operations in late March 2008. At the end of 2008, the following balance sheet was prepared for Fleet:

Explanation / Answer

Hi,

Please find the answer as follows:

Thanks

Cash Flow from Operating Activities

Net Loss
-32200 Adjustments to reconcile net income to net cash provided by operating activities

Add Depreciation Expense 35500
Increase in Accounts Payable 12700
Increase in Unearned Revenue 21800
Increase in Wages Payable 4600
Increase in Rent Payable 8200
Less Increase in Accounts Receivable -15900
Increase in Inventory -3100
Total Adjustments
63800 Net Cash Provided by Operating Activities/Operations
31600

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