Question

Required Information [The following information applies to the questions displayed below.] Mark's Consulting experienced the following transactions for 2018, Its first year of operations, and 2019. Assume that all transactions involve the receipt or payment of cash. Transactions for 2018 1. Acquired $80,000 by Issuing common stock. 2. Received $130,000 cash for providing services to customers. 3. Borrowed $21,000 cash from creditors. 4. Pald expenses amounting to $54,000. 5. Purchased land for $40,000 cash. Transactions for 2019 Beginning account balances for 2019 are: Cash Land Notes payable Common stock Retained earnings $137,000 40,000 21,800 80,000 76,00 1. Acquired an additional $26,000 from the issue of common stock. 2. Received $136,000 for providing services. 3. Pald $16,000 to creditors to reduce loan. 4. Pald expenses amounting to $69.000. 5. Pald a $12,000 dividend to the stockholders. 6. Determined that the market value of the land is $50,000.

Answer 1

1) prepare a statement of cash flows for the year ended 2018
	MARK'S CONSULTING
	SATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,2018
cash flows from operating activities:
received cash for provide service to customers	$ 130,000
borrowed cash from creditors	$ 21,000
expenses paid	($ 54,000)
net cash flow from operating activities		$ 97,000
cash flows from investing activities:
purchased land	( $ 40,000 )
net cash flow from investing activities		( $ 40,000 )
cash flows from financing activities:
issue of common stock	$ 80,000
net cash flow from financing activities		$ 80,000
cash and cash equivalent during the year		$ 137,000
Add: beginning cash balance ( first year)		$ 0
ending cash balance		$ 137,000
1) prepare a statement of cash flows for the year ended 2019
	MARK'S CONSULTING
	SATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31,2019
cash flows from operating activities:
received cash for provide service to customers	$ 136,000
paid cash to creditors	( $ 16,000)
expenses paid	( $ 69,000)
net cash flow from operating activities		$ 51,000
cash flows from investing activities:		$ 0
cash flows from financing activities:
issue of common stock	$ 26,000
dividend paid	( $ 12,000)
net cash flow from financing activities		$ 14,000
cash and cash equivalent during the year		$ 65,000
Add: beginning cash balance		$ 137,000
ending cash balance		$ 202,000

note : market value of land $ 50,000 is not relevant to cash flow statement because only cash transactions during the year is to be considered in cash flow statement