Question

DIRECT CASH FLOW Homework 1. Invested $200,000 to start JHJ rental car company

2. Paid cash of $10,000 for supplies

3. Paid cash of $24,000 for two-year insurance policy

4. Purchased equipment on account in the amount of $10,000

5. Purchased $15,000 in supplies on account

6. Purchased ten autos for $30,000 each paying $50,000 down and signed a long-term note for the balance

7. Received cash car rental revenue $400,000

8. Paid office salaries of $80,000

9. Car rental revenue earned from corporate customers on account $100,000

10. Paid on accounts payable $20,000

11. Collection of cash from corporate customers $50,000

12. Dwight Howard paid $20,000 in advance to rent cars for friends for the NBA All Star Game

13. Depreciation expense on equipment is calculated utilizing straight-line method and five year life

14. Record expiration of one year’s insurance premiums

15. Accrued salaries at end of year totaled $12,000

16. Paid on note payable $25,000 principal and $10,000 interest

REQUIRED: Prepare Statement of cash flow

Answer 1

JHJ rental car company
Cashflow Statement
Cash flows from Operating Activities
Cash Receipts
Cash received from car rental revenue	400,000
Cash received from corporate customers	50,000
Cash received in advance to rent cars	20,000
Total Cash Receipts		470,000
Cash Payments
Cash paid for supplies	10,000
Cash paid for insurance	24,000
Cash paid for salaries	80,000
Cash paid to creditors	20,000
Cash paid for interest	10,000
Total Cash Payments		144,000
Net Cash Provided/(Used) by Operating Activities		326,000
Cash flows from Investing Activities
Purchase of Autos	(50,000)
Net Cash Provided/(Used) by Investing Activities		(50,000)
Cash flows from Financing Activities
Cash invested	200,000
Repayment of Notes payable	(25,000)
Net Cash Provided/(Used) by Financing Activities		175,000
Net Change in Cash		451,000
Cash at Beginning of Period		-
Cash at End of Period		451,000