[jahubb]

This is really confusing to me. Can someone tell me if I have this problem correct.
Dayton Corporation was organized on January 2, 2008 with the investment of 450,000 in cash by its stockholders. The company immediately pruchased an office building for 400,000, paying in cash. Dayton signed a five-year 120,000 promissory note at a bank during 2008 and received cash in the same amount. Durints its first gear Dayton Generated 45,000 in cash from operations and paid 10,000 in cash dividends.
A. Prepare in good form a statement of cash flows for the year ending 12/31/2008.
B. What does this statement tell you that in income statement does not?
Cash Flows From Operating Activities
Cash Generated from operations 45,000
Net Cash From Operating Activities 45,000
Cash Flows From Investment Activities
Office Building 400,000
Net Cash Provided By Investment Activities 400,000
Cash Flows From Financing Activities
Cash dividends Paid 10,000
Proceeds from innuance of Long term note 120,000
Net Cash Provided by Financing Activities 110,000
Net Increase in cash 105,000
Cash at beginning of Year 450,000
Cash at end of Year 555.000
Can Someone Please tell me if this is correct?
Also this might sound real dumb, but what do they mean when they say in good form?

[morgaine300]

You've got a good idea going, with a couple of details off.

You have everything in the correct sections. And anything else I don't mention is correct.

The building is not positive. Always concentrate really hard on which direction the cash is going. This isn't like doing other statements. If you bought a building, did cash come in or go out?

Also, while it might seem logical that they started with 450,000 in cash, they did not. They started with nothing. The 450,000 is a financing activity of issuing stock, which brings in 450,000 in cash. Financing is how the company gets its money, including both equity and long-term debt.

... Looking at it, I notice you don't have a negative on the dividends paid. You need to put parenthesis around the negative numbers so it's obvious. I can tell it's correct cause your total wouldn't be 110,000 otherwise. So that makes me wonder if your 400,000 for the building was meant to be negative. Either way, it doesn't add up 105,000. In fact, I'm not sure where you got the 105,000. Check your math there.

"Good form" is meaning in a good format. i.e. sectioning things properly, titling things, etc. What you have is fairly good -- it's kind of difficult to do "good form" on this forum. Make sure you underline where totalling (just like in math), get negatives around the minus's, leave spaces between the sections. The titles are there, the format is basically there. Just make sure the final version is all prim and proper.

[jahubb]

Please check if this is right. I'm still confused about the cash at the beginnin of the year.
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 45,000
NET CASH PROVIDED BY OPERATING ACTIVITIES 45,000
CASH FLOWS FROM INVESTMENT ACTIVITIES
Office building (400,000)
NET CASH FLOW PROVIDED BY INVESTMENT ACTIVITIES (400,000)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance of stock in cash 450,000
Cash dividends paid (10,000)
Proceeds from issuance of long term note 120,000
NET CASH PROVIDED B FINANCING ACTIVITIES (560,000)
NET INCREASE IN CASH 205,000
CASH AT BEGINNING OF YEAR 0
CASH AT END OF YEAR 205,000
Please check this and see if its correct

[morgaine300]

NET CASH PROVIDED B FINANCING ACTIVITIES (560,000)

This is actually a positive number, but yes it's otherwise correct.