A summary of cash flows for Adventure Travel Service for the year ended April 30, 2019, follows:

A summary of cash flows for Adventure Travel Service for the year ended April 30, 2019, follows:

Cash receipts:

Cash received from customers $2,080,000

Cash received from additional investment of owner 60,000

Cash payments:

Cash paid for operating expenses 1,706,000

Cash paid for land 400,000

Cash paid to owner for personal use 40,000

The cash balance as of May 1, 2018, was $203,000.

Prepare a statement of cash flows for Adventure Travel Service for the year ended April 30, 2019.

Answer:

ADVENTURE TRAVEL SERVICE

Statement of Cash Flows

For the Year Ended April 30, 2019

Cash flows from operating activities:  Cash receipts from customers $ 2,080,000 Cash payments for operating expenses (1,706,000) Net cash flow from operating activities$ 374,000 Cash flows used for investing activities: Cash payment for purchase of land(400,000) Cash flows from financing activities: Cash receipt from owner as investment $ 60,000 Cash withdrawals by owner(40,000) Net cash flow from financing activities20,000 Net decrease in cash during year$ (6,000) Cash as of May 1, 2018203,000 Cash as of April 30, 2019$ 197,000

Using the income statement for Adventure Travel Service shown in Practice Exercise 1-4A, prepare a statement of owner’s equity

Using the income statement for Adventure Travel Service shown in Practice Exercise 1-4A, prepare a statement of owner’s equity for the year ended April 30, 2019. Jerome Foley, the owner, invested an additional $60,000 in the business during the year and withdrew cash of $40,000 for personal use. Jerome Foley, capital as of May 1, 2018, was $1,020,000. 

Answer:

ADVENTURE TRAVEL SERVICE

Statement of Owner’s Equity

For the Year Ended April 30, 2019

Jerome Foley, capital, May 1, 2018$1,020,000 Additional investment by owner during year $ 60,000 Net income for the year455,000 Withdrawals(40,000) Increase in owner’s equity475,000 Jerome Foley, capital, April 30, 2019$1,495,000

The revenues and expenses of Adventure Travel Service for the year ended April 30, 2019, follow: Fees earned $2,180,000

The revenues and expenses of Adventure Travel Service for the year ended April 30, 2019, follow: 

Fees earned $2,180,000

Office expense 400,000

Miscellaneous expense 25,000

Wages expense 1,300,000

Prepare an income statement for the year ended April 30, 2019.

Answer:

ADVENTURE TRAVEL SERVICE

Income Statement

For the Year Ended April 30,2019

Fees earned$2,180,000 Expenses: Wages expense$1,300,000 Office expense400,000 Miscellaneous expense25,000 Total expenses1,725,000 Net income$ 455,000