Air and Sea Travel Case Study

ventilate & sea buy the farm Inc. Case study mien & Sea Travel Inc. a travel agency began operations on April 1, 20X6. During April, the business provided travel services for clients. It is now April 30, and investors wonder how easy personal line of credit & Sea Travel performed during its first month. They also want to know the familiaritys financial position at the set aside of April and its immediate payment flows during the month. The next data is listed in alphabetical order. Prep ar the Air & Sea Travel financial statements at end of April 20X6. Accounts payable $100 Land $18,000 Accounts due 2,000 Office supplies 500 Adjustments to reconcile net Payments of money income to net gold provided Acquisition of land 40,000 by operating activities (2,400) Dividends 2,100 currency balance at the beginning of April 0 Rent outlay 1,100 Cash balance at the end of April 33,300 retain earnings at the beginning of April 0 Cash receipts Retained earnin gs at the end of April ? Issuance gillyflower 50,000 Salary expense 1200 barter of land 22,000 service revenue 8,500 rough-cut stock 50,000 Utilities xpense 400 Dividends 2,100 1. Prepare the income statement, the statement of retained earnings, the statement of specie flows for the month ended April 30, 20X6, and the balance sheet at April 30, 20X6. 2. Answer the sideline questions a. How well did Air & Sea Travel perform during its first month of operations? b. Where does Air & Sea Travel stand financially at the end of April? ASSETSLIABILITIES Cash33,300Account payable100 Account receivable2,000Land 18,000 Insurance stock50,000Office supplies500 Sale of land 22,000Payment of cashCommon stock50,000 Acquisition of land40,000 Dividends2,100 Dividends2,100 Service revenue8,500Rent expense1,100 Salary expense1,200 Utilities expense400 Adjustment to reconcile 2,400 net income to net cash provided by operating activities 1. Air & Sea Travel Inc. Income Statement Ap ril 30, 20X6 Revenues 8,500 Expenses 2,700 Rent expense 1,100 Salary expense 1200 Utilities expense 400 Net income 5,800 Air & Sea Travel Inc. Statement of Retained scratch April 30, 20X6 startle of Retained Earnings 0 Net income 5,800 Cash dividends (2,100) Ending Retained Earnings 3,700 Air & Sea Travel Inc. Balance Sheet April 30, 20X6 Assets Cash 33,300 All former(a) assets 20,500 Land 18,000 Office supplies 500 Account receivable 2,000 Total assets 53,800 Liabilities Acount collectable 100 Total liabilities 100 Stockholders truth Common stock 50,000 Retained earnings 3,700 All other equity 0 Total liabilities and stockholders equity 53,800 Air & Sea Travel Inc. Statement of Cash Flows April 30, 20X6 Net cash provided by operating activities 3,400 Net income 5,800 Adjustments to reconcile net income to net cash provided by operating activities (2,400) Net cash used for investing activities (18,000) Sale of land 22,0 00 Acquisition of land (40,000) Net cash provided by funding activities 47,900 Issuance stock 50,000 Dividends (2,100) Net change in cash 33,300 Beginning cash balance 0 Ending cash balance 33,300 2. a) They performed in truth well, since they got profit in the end of the month. They do not pay withal much salary and they dont swallow too more depts. To be a financially well-managed company, it must generate profit, meaning at that place is more money coming in than going out. This looks to be well managed company since there is a lot of profit in the end of the month. Income Statement, Statement of Retained Earnings, Balance Sheet and Statement of Cash Flows are all on the plus side. Nothing seems to be out of order. b) They have 33,300 retained earnings at the end of April, which means a neat profit.