Statement of cash flows 4) The income statement, balance sheets, and additional
ID: 2600666 • Letter: S
Question
Statement of cash flows
4) The income statement, balance sheets, and additional information for Virtual Gaming Systems are provided. Net sales $2,600,000 7.000 2,607,000 Gain on sale of land Total revenues Expenses Cost of goods sold Operating expenses Depreciation expense Interest expense Income tax expense $1,650,000 615,000 33,000 34,000 80,000 Total expenses 2.412,000 Net income 195,000 2018 2017 Assets Current assets: Cash Accounts receivable Inventory Prepaid rent 409,500 S 343,800 64,000 80,000 160,000 145,000 4,600 7,200 Long-term assets Investments Land Equipment Accumulated depreciation 205,000 110,000 215,000 270,000 250,000 220,000 (143,000) (110.000) $1.165100 S1.066.000 Total assetsExplanation / Answer
Details
Net
Cash Flow from Operating Activities
Net Profit before tax
(195,000 + 80,000)
275,000
Add: Non Cash and Non Operating Expenses
Depreciation
33,000
Interest Expense
34,000
Less: Non Operating Income
Gain on sale of Land
(7,000)
Operating profit before Working Capital changes
335,000
Add: Increase in Current Liabilities And decrease in Current Assets
Decrease in Prepaid Rent
2,600
Decrease in Accounts Receivable
16,000
Less: Decrease in Current Liabilities And Increase in Current Assets
Decrease in Accounts Payable
(63,000)
Increase in Inventory
(15,000)
Operating profit before Income Tax
275,600
Income Tax Paid
(84,000)
Cash Flow from Operating Activities (A)
191,600
Cash Flow from Investing Activities
Sale of Land
62,000
Purchase of Investment
(95,000)
Cash Used in Investing Activities (B)
(33,000)
Cash Flow from Financing Activities
Issue of Shares
60,000
Dividend Paid
(120,000)
Interest paid
(32,900)
Cash Used in Financing Activities ( C )
(92,900)
Increase in Cash Flow (A+B+C)
65,700
Opening Cash
343,800
Closing Cash
409,500
Equipment A/c
In $
In $
To Bal b/d
220,000
To Notes
30,000
By Bal c/d
250,000
Total
250,000
Total
250,000
Acc. Depreciation A/c
In $
In $
By Bal b/d
110,000
By P&L
33,000
To bal. c/d
143,000
Total
143,000
Total
143,000
Income Tax A/c
In $
In $
To Cash
84,000
By Bal b/d
29,000
By P&L
80,000
To bal. c/d
25,000
Total
109,000
Total
109,000
,
Interest A/c
In $
In $
To Cash
32,900
By Bal b/d
4,000
By P&L
34,000
To bal. c/d
5,100
Total
38,000
Total
38,000
,
Non Cash Transaction
Company purchased equipment costing $30,000 by issuing Notes so this will not affect Cash as this will increase the Equipment and Notes balance.
Details
Net
Cash Flow from Operating Activities
Net Profit before tax
(195,000 + 80,000)
275,000
Add: Non Cash and Non Operating Expenses
Depreciation
33,000
Interest Expense
34,000
Less: Non Operating Income
Gain on sale of Land
(7,000)
Operating profit before Working Capital changes
335,000
Add: Increase in Current Liabilities And decrease in Current Assets
Decrease in Prepaid Rent
2,600
Decrease in Accounts Receivable
16,000
Less: Decrease in Current Liabilities And Increase in Current Assets
Decrease in Accounts Payable
(63,000)
Increase in Inventory
(15,000)
Operating profit before Income Tax
275,600
Income Tax Paid
(84,000)
Cash Flow from Operating Activities (A)
191,600
Cash Flow from Investing Activities
Sale of Land
62,000
Purchase of Investment
(95,000)
Cash Used in Investing Activities (B)
(33,000)
Cash Flow from Financing Activities
Issue of Shares
60,000
Dividend Paid
(120,000)
Interest paid
(32,900)
Cash Used in Financing Activities ( C )
(92,900)
Increase in Cash Flow (A+B+C)
65,700
Opening Cash
343,800
Closing Cash
409,500
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