Question

Required information Problem 4-5B Record transactions, post to the Cash T-account, and prepare the statement of cash flows (LO4-7) [The following information applies to the questions displayed below.) Peter loves dogs and cats. For the past several years, he has owned and operated Homeward Bound, which temporarily houses pets while their owners go on vacation. For the month of June, the company has the following transactions: 1. June 2 Obtain cash by borrowing $19,000 from the bank by signing a note. 2. June 3 Pay rent for the current month, $1,200. 3. June 7 Provide services to customers, $4,900 for cash and $3,200 on account. 4. June 11 Purchase cages and equipment necessary to maintain the animals, $8,100 cash. 5. June 17 Pay employees' salaries for the first half of the month, $6,200. 6. June 22 Pay dividends to stockholders, $1,475. 7. June 25 Receive cash in advance from a customer who wants to house his two dogs (Chance and shadow) and cat (Sassy) while he goes on vacation the month of July, $1,950. 8. June 28 Pay utilities for the month, $3,000. 9. June 30 Record salaries earned by employees for the second half of the month, $6,200. Payment will be made on July 2.

Answer 1

Credit Debit $ 19,000 $ 19,000 $ 1,200 Cash Beg.bal $14,400 Rent Expenses $ Note payable $19,000 Equipment $ Service Revenue $ 4.900 Salary expenses $ Unearned Revenue $ 1,950 Dividend $ Utilities expenses $ End.bal $ 1,200 8,100 6,200 1,475 3,000 20,275 $ 1,200 $ -8,500 $ -3,200 $ 1,950 $ 6,200 $19,000 $15.450 $ $ 4,900 3,200 $ 8,100 Cash flow Statement Cash flow from Operatingactivities A Net Income Less: Increase in account receivable Add: Increase in Unearned revenue Add: Increase in Salaries payable Add: Increase in note payable Net Cash flow from operating activities Cash flow from Investing activities B Purchase of Equipment Cash flow from Financing activities C Cash dividend paid Net Cash flow A+B+C Add: Opening Cash Ending Cash balance $ 8,100 $ 40,250 $ 40,250 $ 8,100 Date Accounts Title Jun-02 Cash Note payable Jun-03 Rent Expenses Cash Jun-07 Cash Account receivables Service Revenue | Jun-11 Equipment Cash Jun-17 Salary expenses Cash Jun-22 Dividend Cash Jun-25 Cash Unearned Revenue Jun-28 Utilities expenses Cash Jun-30 Salary expenses Salary payable $ -8,100 $ 6,200 $ 6,200 $ 8,100 $ 1,475 $ -1,475 $ 5,875 $14,400 $20,275 $ Income Statement Service Revenue Less: Expenses Salary expenses Utilities expenses Rent Expenses Net Income 1,475 $ 1,950 $ 12,400 $ 3,000 $ 1.200 $ -8,500 $ 1,950 $ 3,000 $ 3,000 $ 6,200 $ 6,200