Exam 8: Measuring and Reporting Cash Flows

GG Pty Ltd's accounting records show: Beginning Balance Ending Balance 000 000 \ \ Accounts payable 12 8 Inventory 25 21 Cost of sales - 50 Determine the amount of cash paid for inventory for the period.

A motor vehicle was purchased for $25 000, depreciated using the reducing-balance method for 3 years at 20% p.a. and was then sold for a price that was $1 600 more than the carrying amount of the vehicle. The cash received on the sale of the motor vehicle was:

In 2015, G Co repaid $45 000 to the bank on a mortgage loan. $35 000 was interest on the mortgage and $10 000 was repayment of the principal. The repayment would appear in the statement of cash flows as:

Wages expense in the income statement is $58 250 with the statement of financial position at the end of the year showing accrued wages of $2 000. If there were no accrued wages at the beginning of the period, how much was paid out in cash for wages during the year?

If the opening balance of equity is $45 000, the closing balance is $60 000 and profit is $27 000, calculate the amount of dividends paid (assume all dividends declared have been paid)which will appear as a financing outflow in the statement of cash flows.

Which of the three main financial statements was chronologically the last to be required to be included as part of the external financial reports?

What is the rule for converting credit sales to cash received from debtors?

The difference between operating profit or loss after tax and net cash provided by operating activities is due to:

Depreciation of plant and equipment will appear in which section of the statement of cash flows?

Which statement is correct?

What is the report prepared to summarise the entity's cash transactions for the period?

The following information is produced on an accrual basis and relates to Emily's Superior Photo Framers. Statement of comprehensive mcome for the year ended 31 December 2018 Income \8 0,880 Less Photo framing supplies used 14,500 66,380 Less Other Expenses Advertising \ 250 Salaries 18250 Vehicle expenses 5300 Office expenses 3500 Rent of premises 20000 Interest expenses 2000 Depreciation of equipment 3600 52,900 Profit \1 3,480 Statement of financial position as at 31 December 2018 2017 2018 Cunrent Assets \ \ Cash at bank 20500 4030 Accounts receivable 1500 1650 Stock of photo framing supplies 5500 3500 27,500 9,180 Fixed Assets Photo Framing Equipment 55700 65,000 Less Accumulated Depreciation 11200 44,500 14,800 50,200 \7 2,000 \5 9,380 Current Liabilities Creditor owed for vehicle expenses - 1900 Long Term Liabilities Loan Finance Co, repayable by 2020 18,000 15,000 18,000 16,900 Equity Capital - Emily 34,000 34,000 Current account Emily 54,000 42,480 \7 2,000 \5 9,380 Additional Information: • Emily withdrew $25 000 through the year for her own use. • No photo framing equipment was sold during the year. REQUIRED: a)Prepare a classified statement of cash flows for the year ended 31 December 2018 from the above information. Show all workings. b)Prepare a statement reconciling profit with cash flow from operating activities. c)Comment on what the statement of cash flows reveals about the cash situation of Emily's Superior Photo Framers. _____________________________________________________________________________________________ _____________________________________________________________________________________________

From the following information, calculate net cash flow from operating activities. Sales \1 85,000 Less Salaries \ 40,000 Depreciation \ 13,000 Other expenses \ 10,000 Interest expense \ 5,000 \6 8,000 Profit \1 17,000 Statement of financial position extract Start of End of Period Period \ \ Accounts payable 11,000 14,000 Interest expense owing - 1,000

$54 000 is owed to suppliers for inventory purchases at the beginning of the year and $44 000 is owed at the end of the year. If annual credit purchases of inventory are $180 000, the cash paid to suppliers for the year is:

Royal Plastics provides the following information about its moulding machinery: Opening balance of machinery account \5 00,000 Closing balance of machinery account \6 50,000 Depreciation expense for the year \5 0,000 Depreciation charged on machinery sold \1 30,000 Profit on sale of machinery \2 0,000 Caryving value of machinery sold \9 0,000 - How much cash was received from the disposal of machinery?

The cash flow statement was added to reporting requirements because it was believed that the income statement and statement of financial position didn't concentrate enough on:

In a growing business that keeps its asset base up-to-date, total cash flow from investing activities will normally be:

Which of the following is an example of a non-cash investing or financing transaction?

Cash inflows and outflows associated with changes in non-current liabilities and equity, not arising from profit, are included in which section of the statement of cash flows?

Oriole Company had a long-term debt of $1 500 000. To extinguish this debt the company issued $1 500 000 of fully paid shares to the lender. This transaction would have the following impact on the statement of cash flows: