FOPPI BIKES Ltd, sell bicycles, and has been running successfully for a number of years. The...

FOPPI BIKES Ltd, sell bicycles, and has been running successfully for a number of years. The bank has requested a Cash-flow Statement for last month and Signor Foppi provides you with the following transactions / events, and asks for your assistance.

You are required to identify for each cash flow the correct classification, selecting from the drop down list; Operating, Investing or Financing. You must also indicate whether the cash-flow is an inflow or outflow. Where you believe there is no cash flow, use Not Applicable and No Cash-Flow label.

Transactions	Classification	Inflow/Outflow
Purchase inventory on credit $26,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Paid rent for the next three months	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Sold some bikes on credit $12,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Paid employees wages owing from last month	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Raised capital from a public share issue $250,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Repaid a 5 year bank loan $40,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Revalued some obsolete inventory down by $3,000 to its Net Realizable Value	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
An Account Receivable informed us they are bankrupt and will no longer be able to pay us $3,500	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Paid a dividend to the company's share holders $25,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Paid yearly insurance, $2400	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Purchased new shop furniture fittings and equipment $50,000 cash	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Received payment from an Account Receivable (customer)	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Sold some bikes for cash $18,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Paid an Account Payable (Inventory Supplier) $6,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Made a profit of $250 on the sale of some old computers and furniture	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Paid for wireless service and electricity	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Cost of Goods Sold expense for the month $15,000	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow
Depreciation expense for the month $8,750	AnswerOperatingInvestingFinancingNot Applicable	AnswerInflowOutflowNo Cash-flow

Solutions

Expert Solution

Transactions	Classification	Inflow/Outflow
Purchase inventory on credit $26,000	Not Applicable	No Cash flow
Paid rent for the next three months	Operating	Outflow
Sold some bikes on credit $12,000	Not Applicable	No Cash flow
Paid employees wages owing from last month	Operating	Outflow
Raised capital from a public share issue $250,000	Financing	Inflow
Repaid a 5 year bank loan $40,000	Financing	Outflow
Revalued some obsolete inventory down by $3,000 to its Net Realizable Value	Not Applicable	No Cash flow
An Account Receivable informed us they are bankrupt and will no longer be able to pay us $3,500	Not Applicable	No Cash flow
Paid a dividend to the company's share holders $25,000	Financing	Outflow
Paid yearly insurance, $2400	Operating	Outflow
Purchased new shop furniture fittings and equipment $50,000 cash	Investing	Outflow
Received payment from an Account Receivable (customer)	Operating	Inflow
Sold some bikes for cash $18,000	Operating	Inflow
Paid an Account Payable (Inventory Supplier) $6,000	Operating	Outflow
Made a profit of $250 on the sale of some old computers and furniture	Investing	Inflow
Paid for wireless service and electricity	Operating	Outflow
Cost of Goods Sold expense for the month $15,000	Not Applicable	No Cash flow
Depreciation expense for the month $8,750	Not Applicable	No Cash flow

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Bianca Bicycle Company manufactures mountain bikes with a variable cost of $1,600. The bicycles sell for...

Bianca Bicycle Company manufactures mountain bikes with a variable cost of $1,600. The bicycles sell for $2,350 each. Budgeted fixed manufacturing overhead for the most recent year was $11,600,000. Planned and actual production for the year were the same. State whether income is higher under variable or absorption costing and the amount of the difference in reported opearting income under the two methods. Treat each condition as an independent case. (Round intermediate calculations to 2 decimal places.) 1. Production 22,600...

Towy Ltd is a chemical company that has grown rapidly in recent years by successfully exploiting...

Towy Ltd is a chemical company that has grown rapidly in recent years by successfully exploiting a number of innovative products generated by research and development its department. The latest of these products has just completed the final stages of its trials and a decision must now be taken whether or not to proceed to the manufacture of the product. The decision is more difficult in this case than for other products develop by the R&D department. The marketing of...

Question 1. Khan is running a flower shop since last five years successfully. He has five...

Question 1. Khan is running a flower shop since last five years successfully. He has five employees like two salesmen, one cleaner, one shop manager and one accountant. Business growing continuously and expending, so he has opened some more shops in other cities. Due to too much load in accountant department, he decided to do some task himself like to be maintaining cash book, bank dealing and other cash related issues. Ali is commerce graduate, but he is not good...

Peak Bikes, a national bicycle manufacturing company that specializes in producing off-road bicycles (mountain bikes), has...

Peak Bikes, a national bicycle manufacturing company that specializes in producing off-road bicycles (mountain bikes), has hired you as an outside consultant. Peak Bikes currently has 170 both full-time and part-time employees. The firm’s management is organized as follows: Frontline managers: Oversee bike production and production staff. This is the part of the company that actually manufacturers the bicycles. Middle-level managers: Manage frontline managers, track performance versus company’s goals and strategy, and report to top level managers Top-level managers: Set...

A small grassroots organization has been running a food pantry for about five years. They are...

A small grassroots organization has been running a food pantry for about five years. They are located in the community center of a local church. The church is its only major partner. They typically open about two days per week and provide food for local families that stop in. The hours of operation are a bit inconsistent. Most of their donations, of late, have come from the church. Sometimes, they collect hats, scarves and gloves to distribute during winter months....

Urban Drapers Inc., a draperies company, has been successfully doing business for the past 15 years....

Urban Drapers Inc., a draperies company, has been successfully doing business for the past 15 years. It went public eight years ago and has been paying out a constant dividend of $3.20 per share every year to its shareholders. In its most recent annual report, the company informed investors that it expects to maintain its constant dividend in the foreseeable future and that dividends are not expected to increase. If you are an investor who required a 30.00% rate of...

A company manufacturing bicycles has a current annual demand of 1,500 bikes. In buying bike tires,...

A company manufacturing bicycles has a current annual demand of 1,500 bikes. In buying bike tires, they pay $14 per tire with an estimated carrying cost of 20% of the tire’s cost. Each order cost $25 to process. Orders are placed on the first of each month for an equal amount every month. Determine the current ordering cost, carrying cost and total inventory cost each year using the current order quantity. Calculate the EOQ. Determine the current ordering cost, carrying...

Vital Vitamins has been successfully producing herbal remedies for many years but recently its profit margins...

Vital Vitamins has been successfully producing herbal remedies for many years but recently its profit margins have dropped and its managers are reviewing production overheads to try to identify the problem. The table below shows some of the information under review for a product called ‘Supplement C’; 2017 2018 2019 Production overheads £27,901 £30,869 £30,713 Number of units produced 32,425 36,992 36,751 Required: a) Using the high low method, ascertain the fixed production overheads and variable production overheads for producing...

MEMBED Ltd has been in business for the past 20 years. In the last meeting of...

MEMBED Ltd has been in business for the past 20 years. In the last meeting of the Board of Directors, it was proposed that a cost accounting system be established and a Cost Accountant employed. However, the Managing Director disputed this proposal on the grounds that there is no need for a cost accounting system. He also argued that there is no need for a Cost Accountant as the Accountant of the company is enough for all accounting functions. You...

ABC Ltd is a wholesaler of furniture which has been in operation for ten years. It...

ABC Ltd is a wholesaler of furniture which has been in operation for ten years. It buys furniture from five major manufacturers and sells them to a range of customers. The company currently has a customer base of over 500 customers most of which are credit customers. The receivables balance comprises customers owing up to $2,000,000 to smaller balances of about $10,000, all with many different due dates for payments and credit limits. The level of receivables is considerably higher...

Subjects