Given the following information, prepare the Statement of Cash Flows and discuss the company's financial performance.
Ajayi Art, Inc. opened for business on April 1st. Listed below are the transactions for Ajayi Art, Inc. for the month of April:
April 1 Issued common stock in exchange for $250,000 cash.
April 1 Purchased office equipment for $17,500 cash.
April 1 Borrowed $20,000 from Novus Bank and signed a 10% note. Interest and principal to be paid in 12 months.
April 5 Paid $4,000 rent in advance for the art gallery for the next two months.
April 10 Purchased art supplies from Wacky Art Co. on account for $12,200.
April 12 Received $5,300 from a customer who commissioned a piece of custom art to be completed by the end of the year.
April 15 Paid miscellaneous office expenses totaling $285 in cash.
April 17 Billed customers $3,400 for art classes provided in March.
April 19 Paid $3,600 to Wacky Art Co.
April 25 Received $2,200 from customers on account.
April 30 Recorded $3,800 in salaries for the month of April. Paychecks will be disbursed to employees on May 2nd.
Record depreciation using a five-year life on the office equipment, the straight-line method, and no salvage value. Round to whole numbers. Also, record an adjustment for art supplies used in the amount of $2,510 and record interest expense for the note.
The following is the Adjusted Trial Balance: