A Summary of Cash Flows for Linda's Design Services for the Year

question 54

Essay

A summary of cash flows for Linda's Design Services for the year ended December 31 is shown below. $\begin{array}{l}\text { Cash receipts: }\\\begin{array}{lr}\text { Cash received from customers } & \$ 83,990 \\\text { Cash received from sale of stock } & 25,000\end{array}\end{array}$ ? $\begin{array}{lr}\text { Cash payments: }\\\text { Cash paid for expenses } & \$ 27,000 \\\text { Cash paid for land } & 47,000 \\\text { Cash paid for supplies } & 410 \\\text { Dividends } & 5,000\\\\\text { The cash balance as of January 1}&\$ 40,600\end{array}$ ?
Prepare a statement of cash flows for Linda's Design Services for the year ended December 31.

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Definitions:

Inventory Costing

Inventory costing is the method used to assign costs to inventory items, determining the cost of goods sold and remaining inventory value.

Average Cost Formula

A method for determining the cost of inventory by dividing the total cost of goods available for sale by the total number of units available for sale.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, after accounting for sales and purchases during the period.

FIFO

"First In, First Out," an inventory valuation method where goods first bought are the first ones sold, affecting the cost of goods sold and inventory on financial statements.