A summary of cash flows for Sentinel Travel Service for the year ended August 31, 2019, follows:

A summary of cash flows for Sentinel Travel Service for the year ended August 31, 2019, follows:

Cash receipts:

Cash received from customers $734,000

Cash received from additional investment of owner 36,000

Cash payments:

Cash paid for operating expenses 745,600

Cash paid for land 50,000

Cash paid to owner for personal use 20,000

The cash balance as of September 1, 2019, was $89,000.

Prepare a statement of cash flows for Sentinel Travel Service for the year ended August 31, 2019.

Answer:

SENTINEL TRAVEL SERVICE

Statement of Cash Flows

For the Year Ended August 31, 2019

Cash flows from operating activities:  Cash receipt from customers Cash payments for operating expenses Net cash flow used for operating activities Cash flows used for investing activities: Cash payment for purchase of land Cash flows from financing activities: Cash receipt from owner as investment Cash withdrawals by owner Net cash flow from financing activities Net decrease in cash during year Cash as of September 1, 2018 Cash as of August 31, 2019 (50,000) $ 734,000 (745,600)$(45,600) 16,000 $ 36,000 (20,000) SENTINEL TRAVEL SERVICE Statement of Cash Flows For the Year Ended August 31, 2019 $(11,600)$ 43,400

Using the following data for Sentinel Travel Service as well as the statement of owner’s equity shown in Practice Exercise

Using the following data for Sentinel Travel Service as well as the statement of owner’s equity shown in Practice Exercise 1-5B, prepare a report form balance sheet as of August 31, 2019: 

Accounts payable $ 44,600

Accounts receivable 75,500

Cash 45,400

Land 310,000

Supplies 4,700

Answer:

SENTINEL TRAVEL SERVICE

Balance Sheet

August 31, 2019

Cash$ 45,400 Accounts receivable75,500 Supplies4,700 Land310,000 Total assets$435,600 Accounts payable$ 44,600 Barb Schroeder, capital391,000 Total liabilities and owner’s equity$435,600

Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B, prepare a statement of owner’s equity for the year ended

Using the income statement for Sentinel Travel Service shown in Practice Exercise 1-4B, prepare a statement of owner’s equity for the year ended August 31, 2019. Barb Schroeder, the owner, invested an additional $36,000 in the business during the year and withdrew cash of $18,000 for personal use. Barb Schroeder, capital as of September 1, 2018, was $380,000.

Answer: 

SENTINEL TRAVEL SERVICE

Statement of Owner’s Equity

Barb Schroeder, capital, September 1, 2018$380,000 Additional investment by owner during year $ 36,000 Net loss for the year(7,000) Withdrawals(18,000) Increase in owner’s equity11,000 Barb Schroeder, capital, August 31, 2019$391,000

The revenues and expenses of Sentinel Travel Service for the year ended August 31, 2019, follow:

The revenues and expenses of Sentinel Travel Service for the year ended August 31, 2019, follow: 

Fees earned $750,000

Office expense 295,000

Miscellaneous expense 12,000

Wages expense 450,000

Prepare an income statement for the year ended August 31, 2019.

Answer:

SENTINEL TRAVEL SERVICE

Income Statement

For the Year Ended August 31, 2019

Fees earned$750,000 Expenses: Wages expense$450,000 Office expense295,000 Miscellaneous expense12,000 Total expenses757,000 Net loss$ (7,000)