Paul€™s Painters, a service organization, prepared the following special report for the month of January 2015:

Required:
1. The owner (who knows little about the financial part of the business) asked you to compute the amount by which cash had increased in January 2015 from the operations of the company. You decided to prepare a detailed report for the owner with the following major captions: cash inflows (collections), cash outflows (payments), and the difference€” net increase (or decrease) in cash.
2. Reconcile the difference€” net increase (or decrease) in cash€” you computed in (1) with the net earnings for January 2015 by filling in the following chart:

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Service Revenue, Expenses, and Net Earnings $105,000 30,500 Service revenue Cash services (per cash register tape) Credit services (per charge bills; not yet collected by end of January) $135,500 Expenses Salaries and wages expense (paid by cheque) Salaries for January not yet paid Supplies used (taken from stock, purchased for 50,000 3,000 2,000 500 cash during December) Estimated cost of using company-owned truck for he month (depreciation) Other expenses (paid by cheque) Eamings before income tax Income tax expense (not yet paid) 26,000 91,500 54,000 13,500 $ 40,500 Net earnings for January Reconciliaton with net eamings: Net earnings Deduct Non-cash services Add: Non-cash expenses Net increase (decrease) in cash $40,500