Exercise 13-8 The comparative statement of financial position for Charmaine Reta

Question

Exercise 13-8 The comparative statement of financial position for Charmaine Retailers Ltd. follows: CHARMAINE RETAILERS LTD Statement of Financial Position December 31 Assets Cash Accounts receivable Merchandise inventory Furniture Accumulated depreciation Total assets 2015 2014 $ 18,360 $ 9,180 42,840 171,360 145,860 81,600 51,000 166,260 (45,900) (24,480) $361,080 $255,000 Liabilities and Shareholders' Equity Accounts payable Bank loan payable (noncurrent) Common shares Retained earnings Total liabilities and shareholders' equity $361,080 $ 45,900 $35,700 77,520 56,100 148,920 ,60 105,060 61,200 85,680 $255,000 Additional information: 1. Profit was $63,240 in 2015 2. Depreciation expense was $21,420 in 2015 3. Payments made to the bank pertaining to the bank loan were $10,200 in 2015. Some new loans were obtained that year 4. Common shares were issued in 2015 and no shares have been bought back by the company 5. In 20 15, no furniture was sold

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income         63,240.00 Depreciation         21,420.00 Increase in AR         (8,160.00) Increase in inventory       (25,500.00) Increase in prepaid expenses Increase in AP         10,200.00 Cash flow from operating activities         61,200.00 Cash flow from Investing activities Purchase of furniture       (84,660.00) Cash flow from Investing activities       (84,660.00) Cash flow from Financing activities Issue of Stock            5,100.00 Issue of Loan = 105060 - 77520         27,540.00 Cash flow from Financing activities         32,640.00 net change in cash and cash equivalents            9,180.00 Opening cash and cash equivalents            9,180.00 Closing cash and cash equivalents         18,360.00

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