1. What is the amount of the net increase or decrease in cash and cash equivalen
ID: 2451758 • Letter: 1
Question
1.
What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the company’s statement of cash flows?
2.
What net income would the company include on its statement of cash flows?
3.
How much depreciation would the company add to net income on its statement of cash flows?
4.
If the company debited Accounts Receivable and credited Sales for $1,320,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year?
1.
What is the amount of the net increase or decrease in cash and cash equivalents that would be shown on the company’s statement of cash flows?
2.
What net income would the company include on its statement of cash flows?
3.
How much depreciation would the company add to net income on its statement of cash flows?
4.
If the company debited Accounts Receivable and credited Sales for $1,320,000 during the year, what is the total amount of credits recorded in Accounts Receivable during the year?
Explanation / Answer
Net Income / Loss
-8000
Less: Profit on sale of equipment
-1400
Add: Depreciation for the year
39400
Add: Dividend Paid
13200
43200
Add: Decrease in Account Receivables
7000
50200
Less: Increase in Inventory
10600
Less: Decrease in Accounts Payables
54600
Less: Decrease in Tax payables
19800
Net Cash outflow from operating activities
- 34800
Cash flow from Investing Activities
Purchase of fixed assets
-25600
Sale of equipment
6600
Net Cash outflow from Investing Activities
-19000
Cash flow from Financing Activities
Issue of Bonds
22000
Issue of Common Stock
22000
Dividend paid
-13200
Net Cash Inflow from Financing Activities
30800
Net cash used in all activities
-23000
Add: Opening balance of cash and cash equivalents
136600
Ending balance of cash and cash equivalents
113600
2. Net Income company would the company include on its cash flow = (Opening balance of Retained earnings – Closing balance of retained earnings) = - 8000
3. Amount of depreciation would the company add to net income on its statement of cash flows = 39400
4. Now Net effect of accounts receivables in cash flow is 7000 is 132000 is debited then 125000 will be deducted as increase in account receivables.
Net Income / Loss
-8000
Less: Profit on sale of equipment
-1400
Add: Depreciation for the year
39400
Add: Dividend Paid
13200
43200
Add: Decrease in Account Receivables
7000
50200
Less: Increase in Inventory
10600
Less: Decrease in Accounts Payables
54600
Less: Decrease in Tax payables
19800
Net Cash outflow from operating activities
- 34800
Cash flow from Investing Activities
Purchase of fixed assets
-25600
Sale of equipment
6600
Net Cash outflow from Investing Activities
-19000
Cash flow from Financing Activities
Issue of Bonds
22000
Issue of Common Stock
22000
Dividend paid
-13200
Net Cash Inflow from Financing Activities
30800
Net cash used in all activities
-23000
Add: Opening balance of cash and cash equivalents
136600
Ending balance of cash and cash equivalents
113600
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