In: Accounting
Villa Corporation (VC) is a private company that follows ASPE. The company’s policy is to report all cash flows arising from interest and dividends as operating activities. The company’s activities for the year ended December 31, 2020 included the following:
Required:
Cash Flow Statement (Partial)
For the Year Ended December 31, 2020 (Indirect Method)
Net Cash Flow from Operating Activities |
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Cash Flow Statement (Partial) | |||
For the year ended December 31, 2020 Indirect Method | |||
Particulars | Calculation | Amount | |
Cash Flow from Operating Activities | |||
Income before income taxes | 400,000.00 | ||
Income tax expense | (50,000.00) | ||
Dividends | 400000-50000-340000 | 10,000.00 | |
Net Income | 360,000.00 | ||
Adjustments to Net Income: | |||
Increase in Dividend Payable | 5000 | ||
Increase in Income Tax Payable | 2000 | ||
Increase in Interest Expense Payable | 12000 | ||
Decrease in Accounts Receivable | 18000 | ||
Increase in Accounts Payable | 40000 | ||
Increase in Inventory | -14000 | ||
Gain on sale of equipment | `-42000+40000 | -2000 | |
Loss on sale of investment | 15000-12000 | 3000 | |
Depreciation Expense | 22000 | ||
Goodwill impairment loss | 15000 | ||
Total Net Adjustments | 101,000.00 | ||
Net Cash flow from operating activities | 461,000.00 | ||
Cash Flow from Investing Activities | |||
Sale of Equipment | 42,000.00 | ||
Sale of long term investment | 15,000.00 | ||
Equipment Purchases in cash | (200,000.00) | ||
Net Cash Flow used in Investing Activities | (143,000.00) | ||
Cash Flow from Financing Activities | |||
Loan from local bank for payment of equipment purchase | 180,000.00 | ||
Net Cash flow from financing activities | 180,000.00 |