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Cash Flow Analysis for Softbyte Startup

Raya and Barbar establish a programming service named Softbyte, investing $15,000 in capital shares. Throughout September 2011, Softbyte engages in various transactions including purchasing equipment, providing services, incurring expenses, and receiving payments from customers. The document outlines the cash flow activities necessary to determine the cash position using direct methods.

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15 views1 page

Cash Flow Analysis for Softbyte Startup

Raya and Barbar establish a programming service named Softbyte, investing $15,000 in capital shares. Throughout September 2011, Softbyte engages in various transactions including purchasing equipment, providing services, incurring expenses, and receiving payments from customers. The document outlines the cash flow activities necessary to determine the cash position using direct methods.

Uploaded by

etoile2127q
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Exercise

Raya and Barbar decides to open a computer programming service which he names Softbyte

1. On September 1, 2011, they invest $15,000 cash in exchange for capital shares.
2. Softbyte purchases computer equipment for $7,000 cash.
3. Softbyte purchases for $1,600 from Acme Supply Company computer paper and other supplies
expected to last several months.
4. Softbyte receives $1,200 cash from customers for programming services it has provided.
5. Softbyte receives a bill for $250 from the Daily News for advertising but postpones payment until a
later date.
6. Softbyte provides $3,500 of programming services for customers. The company receives cash of
$1,500 from customers, and it bills the balance of $2,000 on account.
7. Softbyte pays the following Expenses in cash for September: store rent $600, salaries of employees
$900, and utilities $200.
8. Softbyte pays its $250 Daily News bill in cash.
9. Softbyte receives $600 in cash from customers who had been billed for services [in Transaction (5)
10. The corporation pays a dividend of $1,300 in cash.

Required: Determine cash by using - Direct Methods

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