Question

Statement of Cash Flows

Question 1

You are provided the following financial information for Moore Mangoes Company – a fruit & vegetable shop owned by T. Moore :

MOORE MANGOES LTD

COMPARATIVE BALANCE SHEETS

AS AT JUNE 30

	2017		2016
Current Assets
Cash on hand	$1,300		$1,800
Accounts Receivable (net)	1,855		2,100
Inventory	4,600		4,350
Prepaid Rent Expenses	1,200	$8,955	900	$9,150
Non Current Assets
Equipment	42,600		41,000
Accumulated Depreciation	(21,000)	21,600	(20,200)	20,800
Total Assets		$30,555		$29,950
Current Liabilities
Bank Overdraft/Overdrawn	$ --		$4,200
Accounts Payable	2,200		2,350
Accrued Expenses	800		600
Income Tax Payable	930	$3,930	1,080	$8,230
Non Current Liabilities
Term Loan (See Note)	10,000	10,000	5,000	5,000
Total Liabilities		$13,930		$13,230
Shareholders’ Equity
Capital Stock	15,000		10,000
Retained Earnings	1,625	16,625	6,720	16,720
Total liabilities and Shareholders’ Equity		$30,555		$29,950

MOORE MANGOES COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED JUNE 30, 2017

Net Sales		$48,000
Cost of Goods Sold		22,500
Gross Profit		$25,500
Gain from Sale of Equipment		300
		$25,800
Expenses:
Selling & Admin Expense	$12,400
Bad Debts Expense	50
Depreciation Expense	8,500
Interest Expense	700	21,650
Profit before tax		$4,150
Income tax expense		1,245
Net Income		$2,905

Additional Information:

1)         During the year a piece of equipment was sold for a gain of $300.

2)         New equipment was purchased for $9,600. This was financed by a 2 years term loan of $5,000 with the balance paid in cash.

3)         Moore paid himself some dividends during the year.

Required:

Prepare the Statement of Cashflows for Moore Mangoes for the year ended June 30, 2017, include the supplementary section, under the Indirect Method.

Answer 1