note I repost third time but therea re problem form cash flow for financial acti
ID: 2588106 • Letter: N
Question
note I repost third time but therea re problem form cash flow for financial activites the bank loan told me not 31,000 although the final answe is correct please verify which correct
Question: Exercise 13-7 The comparative unclassified statement of financial position for Oriole Ltd. follo...
Exercise 13-7
The comparative unclassified statement of financial position for Oriole Ltd. follows:
$53,000
$22,000
88,000
61,500
182,000
193,500
74,000
100,000
300,000
182,000
(64,000
)
(34,000
)
$633,000
$525,000
$39,000
$ 45,000
204,000
173,000
195,000
171,000
195,000
136,000
$633,000
$525,000
Additional information:
( a) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Statement of Financial Position
December 31 Assets 2018 2017 Cash
$53,000
$22,000
Accounts receivable88,000
61,500
Inventory182,000
193,500
Long-term investments74,000
100,000
Equipment300,000
182,000
Accumulated depreciation(64,000
)
(34,000
)
Total assets$633,000
$525,000
Liabilities and Shareholders’ Equity Accounts payable$39,000
$ 45,000
Bank loan payable204,000
173,000
Common shares195,000
171,000
Retained earnings195,000
136,000
Total liabilities and shareholders’ equity$633,000
$525,000
Explanation / Answer
Oriole Ltd.
Statement of Cashflow
For the year ending 31 December 2018
Net cash provided by operating activities (A)
2) Cashflow from Investing activities
Net cash used in Investing activities (B)
3) Cashflow from Financing activities
Working Note :
!) The amount of $62,000 is taken in additional bank laon because the sum of $31,000 is paid during the year so,
Additonal Bank loan = Closing bank balance (204,000) + Loan paid during the year ($31000) - Opening bank loan ($173,000)
= $62,000
2) The amount of Retained earning is increased by the the net income earned during the year and is decreased when dividend is paid out of it. Since, the net income for the year is $119,000 and the net increase in the retained earning from last year is only $59,000 ( $195,000 - $136000) it is obvious that the difference amount of $60,000($119000 - $ 59000) is being used to pay out dividend for the year.
Particular Amount 1) Cashflow from operating activities Net Income $119,000 + Interest Paid $14,000 + Depreciation $30,000 - Gain from sale of long term investment - $5,000 (Increase)/Decrease in current assets Increase in accounts Receivable - $ 26,500 Decrease in Inventory $11500 Increase/(Decrease) in current Liabilty Increase in Accounts Payable -$6000Net cash provided by operating activities (A)
$137,0002) Cashflow from Investing activities
Purchase of Equipments - $118,000 Sale of long term investment $26,000 Profit on sale of investment $5,000Net cash used in Investing activities (B)
- $87,0003) Cashflow from Financing activities
Issue of Common stock $24,000 Payment of bank Loan - $31,000 Additional bank laon Taken (Note 1) $62,000 Interest Paid - $14,000 Dividend Paid (Note 2) - $60,000 Net cash used in Financing activities - $19,000 Net Increase or Decrease in Cash (D) (D=A+B+C) $31,000 Opening Cash Balance (E) $ 22,000 Closing Cash balance (F) (F=D+E) $ 53,000Related Questions
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