Prepare a statement of cash flows for the month ended July 31, 2004.

Scott Douma established Top-Notch Computer Services on July 1, 2004. The effect of each transaction and the balances after each transaction for July are shown in the table at the top of the following page.

Instructions

1. Prepare an income statement for the month ended July 31, 2004.

2. Prepare a retained earnings statement for the month ended July 31, 2004.

3. Prepare a balance sheet as of July 31, 2004.

4. Prepare a statement of cash flows for the month ended July 31, 2004.

Assets

=

Liabilities

+

Stockholders’ Equity

 

 

 

 

 

Notes

 

Capital

 

Retained

 

 

Cash

+

Land

=

Payable

+

Stock

+

Earnings

 

a.

+18,000

 

 

 

 

 

+18,000

 

 

Investment

b.

+12,250

 

 

 

 

 

 

 

12,250

Fees earned

Bal.

30,250

 

 

 

 

 

18,000

12,250

 

 

c.

-2,000

 

 

 

 

 

 

-2,000

 

Rent expense

Bal.

28,250

 

 

 

 

 

18,000

 

10,250

 

d.

+10,000

 

 

 

+10,000

 

 

 

 

 

Bal.

38,250

 

 

 

10,000

 

18,000

 

10,250

 

e.

-25,000

 

+25,000

 

 

 

 

 

 

 

Bal.

13,250

 

25,000

 

10,000

 

18,000

 

10,250

 

f.

-1,150

 

 

 

 

 

 

 

-800

Auto expense

 

 

 

 

 

 

 

 

 

-350

Misc. expense

Bal.

12,100

 

25,000

 

10,000

 

18,000

 

9,100

 

g.

-2,500

 

 

 

 

 

 

 

-2,500

Salaries expense

Bal.

9,600

 

25,000

 

10,000

 

18,000

 

6,600

 

h.

-1,000

 

 

 

 

 

 

 

-1,000

Dividends

Bal.

8,600

 

25,000

 

10,000

 

18,000

 

 

5,600

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