Question

Kids ’n Caboodle, a children’s clothing store, had the following cash receipts and disbursements
for its first year of operations:
Receipts:
Cash sales $155,000
Loan proceeds ___2_1_,_0_0_0_
Total receipts ____1__7__6__,__0__0__0__
Disbursements
Merchandise purchases (all sold this year) 84,000
Wages 33,000
Rent and lease payments 22,000
Other operating outlays 7,900
Purchase equipment ___1_0_,_5_0_0_
Total disbursements __1_5_7_,_4_0_0_
Increase in Cash Balance $______1__8__,__6__0__0__
The store has no accounts receivable (it accepts only cash or bank cards for payment). At
year-end, an employee had earned $200, which the store had not yet paid. Also, at year-end,
the store had not paid its most recent utilities bills, which totaled $150.
Required:
Prepare a cash flow statement for the year.

Answer 1

• All working forms part of the answer
• All figures amount is in $
• Working

Cash Received		Cash paid
Cash Sales	155000	Purchases	84000
Loan	21000	Wages	33000
		Rent & Lease payments	22000
		Other operating outlays	7900
		Purchase equipment	10500
Total received	176000	Total disbursed	157400

Total received	176000
Total disbursed	157400
Closing balance	18600

• Income Statement- Calculation of Net Income

Sales	155000
Expenses:
Purchases	84000
Wages	33000
Rent & Lease payments	22000
Other operating outlays	7900
Wages (payable)	200
Utilities exp (due)	150
Total expense	147250
Net Income	7750

• Cash Flow Statement

A. Cash Flow from Operating activities		In $
Net Income	7750
Add: Increase in current liabilities
Wages payable	200
Utilities payable	150
Cash flow from operating activities		8100
B. Cash flow from Investing activities
Equipment purchased	-10500
Cash flows from Investing activities		-10500
C. Cash flow from Financing activities
Loan proceeds	21000
Cash flow from financing activities		21000
Net Increase/(decrease) in cash (A+B+C)		18600
Add: Cash in beg		0
Cash balance at the end		18600