STATEMENT OF CASH FLOWS A comparative balance sheet for the Last Corporation is
ID: 2422005 • Letter: S
Question
STATEMENT OF CASH FLOWS
A comparative balance sheet for the Last Corporation is presented below:
Last Corporation
Balance Sheet
December 31, 2014
2014
2013
Assets
Cash
$53,140
$33,000
Accounts Receivable
19,000
22,000
Inventory
20,000
12,000
Total Current Assets
$92,140
$67,000
Land
$55,000
$60,000
Equipment
160,000
140,000
Less Accumulated Depreciation
(60,500)
(50,000)
Total Non-current Assets
$154,500
$150,000
Total Assets
$246,640
$217,000
Liabilities
Accounts Payable
$31,000
$25,000
Current Portion of Bank Loan
18,000
22,000
Total Current Liabilities
$49,000
$47,000
Non-Current portion of Bank Loan
70,000
65,000
Total Liabilities
$119,000
$112,000
Shareholders' Equity
Common Shares
$80,000
$70,000
Retained Earnings
47,640
35,000
Total Shareholders' Equity
$127,640
$105,000
Total Liabilities and Shareholders' Equity
$246,640
$217,000
Additional information
Net income for the year is $34,730.
There was no purchase of land, or a gain/loss on sale of land.
There were no sales of equipment.
Cash dividends were paid during the year.
REQUIRED:
Prepare the cash flow statement for December 31, 2014 using the indirect method.
Last Corporation
Balance Sheet
December 31, 2014
2014
2013
Assets
Cash
$53,140
$33,000
Accounts Receivable
19,000
22,000
Inventory
20,000
12,000
Total Current Assets
$92,140
$67,000
Land
$55,000
$60,000
Equipment
160,000
140,000
Less Accumulated Depreciation
(60,500)
(50,000)
Total Non-current Assets
$154,500
$150,000
Total Assets
$246,640
$217,000
Liabilities
Accounts Payable
$31,000
$25,000
Current Portion of Bank Loan
18,000
22,000
Total Current Liabilities
$49,000
$47,000
Non-Current portion of Bank Loan
70,000
65,000
Total Liabilities
$119,000
$112,000
Shareholders' Equity
Common Shares
$80,000
$70,000
Retained Earnings
47,640
35,000
Total Shareholders' Equity
$127,640
$105,000
Total Liabilities and Shareholders' Equity
$246,640
$217,000
Explanation / Answer
Last Corporation
Statement of Cash Flows
For the Years Ending December 31, 2014
2014
Cash Flows from Operating Activities
Net Income
34,730
Add Expenses Not Requiring Cash:
Depreciation
10,500
Other Adjustments:
Add Reduction in Accounts Receivable
3,000
Add Increase in Accounts Payable
6,000
Subtract Increase in Inventory
(8,000)
Net Cash from Operating Activities
46,230
Cash Flows from Investing Activities
Sale of Fixed Assets
5,000
Purchae of Fixed Assets
(20,000)
Net Cash Used for Investing Activities
(15,000)
Cash Flows from Financing Activities
Issue of Common Shares
10,000
Non-Current portion of Bank Loan
5,000
Current Portion of Bank Loan
(4,000)
Dividend
(22,090)
Net Cash from Financing Activities
(11,090)
NET INCREASE/(DECREASE) IN CASH
20,140
CASH, BEGINNING OF YEAR
33,000
CASH, END OF YEAR
53,140
Divdidend Paid=Op Retained earning + Net income –Cl Retained earning
Last Corporation
Statement of Cash Flows
For the Years Ending December 31, 2014
2014
Cash Flows from Operating Activities
Net Income
34,730
Add Expenses Not Requiring Cash:
Depreciation
10,500
Other Adjustments:
Add Reduction in Accounts Receivable
3,000
Add Increase in Accounts Payable
6,000
Subtract Increase in Inventory
(8,000)
Net Cash from Operating Activities
46,230
Cash Flows from Investing Activities
Sale of Fixed Assets
5,000
Purchae of Fixed Assets
(20,000)
Net Cash Used for Investing Activities
(15,000)
Cash Flows from Financing Activities
Issue of Common Shares
10,000
Non-Current portion of Bank Loan
5,000
Current Portion of Bank Loan
(4,000)
Dividend
(22,090)
Net Cash from Financing Activities
(11,090)
NET INCREASE/(DECREASE) IN CASH
20,140
CASH, BEGINNING OF YEAR
33,000
CASH, END OF YEAR
53,140
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