Question

In: Accounting

1. Cash Flow Statements Prepare a cash flow statement for Anna’s Apples Ltd using the information below....

1. Cash Flow Statements

Prepare a cash flow statement for Anna’s Apples Ltd using the information below. Use the indirect method for operating cash flows.

Net Profit for year ended 30 June 2017: $200,000

30 June 2017 1 July 2016

Cash ? $20,000

Inventory $30,000 $40,000

Accounts Payable $15,000 $30,000

Unearned Revenue $12,000 $15,000

Prepaid Insurance $18,000 $33,000

Goodwill $50,000 $0

Equipment $300,000 450,000

Acc Dep’n Equipment $150,000 $160,000

Loan Payable $50,000 $100,000

During the year equipment with a cost of $150,000 and accumulated depreciation of $50,000 was sold for $115,000. No other purchases or sales of equipment was made during the year.

During the year another business was purchased for cash.

Expert Solution

All working forms part of the answer
Statement of Cash Flows is prepared below from the available data.
Concepts – Indirect Method

No.	Conceptual Notes
1	Cash Flow Statement reflects the Cash Inflows and Outflows during a period of time.
2	Effects of Non - Cash Transaction are adjusted from Net Income.
3	Depreciation Expense, Amortisation expenses are Added back to Net Income in Cash Flow Statement.
4	Decrease in Current Assets OR Increase in Current Liabilities are ADDED to Net Income
5	Increase in Current Assets OR Decrease in Current Liabilities are DEDUCTED from Net Income

Workings

Working #1: Change in Operating Working Capital
	Beginning Balance (1 Jul 2016)	Ending Balance (30 June 2017)	Increase (Decrease)
Inventory	$ 40,000.00	$ 30,000.00	$ (10,000.00)
Accounts Payable	$ 30,000.00	$ 15,000.00	$ (15,000.00)
Unearned revenue	$ 15,000.00	$ 12,000.00	$ (3,000.00)
Prepaid Insurance	$ 33,000.00	$ 18,000.00	$ (15,000.00)

Working #2: Depreciation Expenses
A	Ending Balance - Accumulated Depreciation	$ 150,000.00
B	Accumulated Depreciation on Equipment sold	$ 50,000.00
C	Beginning Balance - Accumulated Depreciation	$ 160,000.00
D = A + B - C	Depreciation expense for the period	$ 40,000.00

Working #3: Gain on Sale of Equipment
A	Equipment sold costing	$ 150,000.00
B	Accumulated Depreciation on above	$ 50,000.00
C = A - B	Book Value	$ 100,000.00
D	Sold for	$ 115,000.00
E = D - C	Gain on sale of Equipment	$ 15,000.00

Answer: Cash Flow Statement

Statement of Cash Flows - Indirect Method
*Cash flows from Operating Activity*
Net Income		$ 200,000.00
Adjustments to reconcile Net Income to
Net Cash provided by Operating activities
Depreciation Expenses [Working #2]	$ 40,000.00
Gain on sale of Equipment [Working #3]	$ (15,000.00)
Decrease in Inventory [Working #1]	$ 10,000.00
Decrease in Accounts payable [Working #1]	$ (15,000.00)
Decrease in Unearned revenue [Working #1]	$ (3,000.00)
Decrease in Prepaid Insurance [Working #1]	$ 15,000.00	$ 32,000.00
Net Cash flows from Operating Activities		$ 232,000.00

*Cash Flows from Investing activities*
Cash received from sale of Equipment	$ 115,000.00
Goodwill	$ (50,000.00)
Net Cash flow from Investing activities		$ 65,000.00

*Cash Flows from Financing Activities*
Cash paid for repayment of Loan Payable	$ (50,000.00)
Net Cash flows from Financing activities		$ (50,000.00)

Net Increase in Cash		$ 247,000.00
Cash at the beginning [1 Jul 2016]		$ 20,000.00
Cash at the end [30 June 2017]		$ 267,000.00

ekkarill92 answered 2 years ago

INSTRUCTIONS: Using the financial information below, prepare a proper cash flow statement, including any necessary disclosures....

INSTRUCTIONS: Using the financial information below, prepare a proper cash flow statement, including any necessary disclosures. COMPARATIVE BALANCE SHEET Year 2 Year 1 Cash 133,000 195,000 Accounts Receivable 372,000 110,000 Allowance for Doubtful Accounts (20,000) (10,000) Inventory 395,000 155,000 Reserve for Obsolete Inventory (5,000) (5,000) Prepaid Expenses 15,000 - Equipment, net 155,000 165,000 Total Assets 1,045,000 610,000 Accounts Payable 81,000 100,000 Corporate Income...

Prepare a balance sheet and cash flow statement using the selected financial statement information and additional...

Prepare a balance sheet and cash flow statement using the selected financial statement information and additional data for Stanislaus Co. presented below. Balance sheet December 31 2015 Cash.......................................................... $52,000 Accounts receivable (net)........................... 64,000 Inventory.................................................. 178,000 Land.......................................................... 78,800 Equipment................................................. 504,000 TOTAL............................................ $876,800 Accumulated depreciation.......................... $94,000 Accounts payable....................................... 50,400 Notes payable - short-term........................ 67,200 Notes payable - long-term.......................... 178,000 Common stock........................................... 420,000 Retained earnings...................................... 67,200 TOTAL............................................ $876,800 ...

Prepare a Statement of cash flow using the DIRECT method. Not all information listed may be...

Prepare a Statement of cash flow using the DIRECT method. Not all information listed may be used in solving this problem Collect ted $500,000 paid suppliers $10,000 Increased in Market Securities $11,000 paid mortgage principal $13,000 Paid employees $65,000 Sold fixed assets $32,000 Transferred to parent $18,000 Insurance payments $17,000 Purchased new equipment $55,000 Additional long term debt $2,500 Interest payments $7,000 Unrestricted contributions $60,000

Prepare a statement of cash flows for 2020 using the indirect method using the information below....

Prepare a statement of cash flows for 2020 using the indirect method using the information below. Pennant Corporation's end of year comparative balance sheets are presented below. Pennant Corporation Comparative Balance Sheets December 31 2020 2019 Cash $ 15,200 $ 17,700 Accounts receivable 25,200 22,300 Investments 20,000 16,000 Equipment 60,000 70,000 Accumulated depreciation (14,000) (10,000) Total $106,400 $116,000 Accounts payable $ 14,600 $11,100 Bonds payable ...

How to and an example: 1. Prepare Operating activities for the statement of cash flow using...

How to and an example: 1. Prepare Operating activities for the statement of cash flow using indirect method

Prepare statement of cash flow from the financial statement of Alfalah (Pvt) Ltd. For the year...

Prepare statement of cash flow from the financial statement of Alfalah (Pvt) Ltd. For the year ended. PROFIT AND LOSS STATEMENT 2017 RS. Sales 757,645 Cost of sales (628,143) Gross Profit 129,502 Administration expense 14,723 Other expenses 21,992 Gain on sale of fixed assets (2,000) Depreciation expenses 23,000 57,715 Profit before income tax 71,787 Income tax expenses(current) and deferred) 23,787 Net profit after tax 48,000 STATEMENT OF RETAINED EARNINGS Retained earnings, beginning of period 7,312 Net profit for the period...

Using the below financial statements to complete the ratio analysis and statement of Cash Flow questions...

Using the below financial statements to complete the ratio analysis and statement of Cash Flow questions following the financial statements. Milky Way corp comparative Balance sheet December 31, 20XX and 20XX (Prior) Assets Current Prior Cash 1,580 1,080 Account Receivable 1,300 1,680 Inventory 12,420 12,000 Total Current Assets 15,300 14,760 Land 12,300 10,200 Equipment 11,480 9,600 Accumulated Depreciation (2,040) (1,080) Total Long-term Assets 37,040 33,480 Liabilities Account Payable 1,920 960 Salaries Payable 5,060 4,080 Total Current Liabilities 6,980 5,040 Long-term...

INDIRECT METHOD - STATEMENT CASH FLOW Using information below, Create a Statement of Cashflow (INDIRECT METHOD)...

INDIRECT METHOD - STATEMENT CASH FLOW Using information below, Create a Statement of Cashflow (INDIRECT METHOD) **Note: create the statement for the year of 2018 only. Net Income from Income statement: $105,000.00 the Retained Earnings was $80,000.00 2017 2018 Accounts Payable $81,000 $66,000 Accounts Receivable $110,000 $128,000 Accumulated Depreciation, PP&E $290,000 $356,000 Cash and Cash Equivalents $62,000 $54,000 Common Stock $415,000 $425,000 Cost of Goods Sold $359,000 $368,000 Depreciation Expense $62,000 $66,000 Dividends $20,000 $25,000 Income Tax Expense $18,000 $23,000...

From the information given, prepare two of the three sections of the cash flow statement. Prepare...

From the information given, prepare two of the three sections of the cash flow statement. Prepare the “financing” and the “investing” sections. 2019 2018 Assets Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....

Abc trading provided following information :- 1. Prepare a Cash Flow Statement from the following information...

Abc trading provided following information :- 1. Prepare a Cash Flow Statement from the following information for the year ended 30 June 2021. 2. Prepare a Statement in accordance with AASB 107 reconciling net cash flows from operating activities to operating profit after income tax. Borrowed from NAB Bank $22,500 Cash at the beginning of the year $100,050 Cash received from Accounts Receivable $136,000 Cash received from sale of equipment $10,000 Cash paid for operating expenses $36,300 Cash sales $80,500...