a) Prepare a statement of cash flows using the direct method for the year ended 31 December 2020. The cash flows below were extracted from the accounts of Willow Ltd shop owner. Netcash equivalent at beginning of period total £160.3.Acquisition of subsidiaryProceeds from issue of share capitalCash paid to suppliers and employeesPurchase of property, plant and equipmentProceeds from long-term borrowingsInterest paidIncome taxes paidDividends receivedPayment of finance lease liabilitiesProceeds from sale of equipmentCash receipts from customers55025027,600350250270900200902030,150Interest received200Dividends paidCash and cash equivalents at end of period (31/12/20)1,200270

A cash flow statement is the part of the financial statement which is prepared by the company to…

Answered: a) Prepare a statement of cash flows…

Business

Accounting

a) Prepare a statement of cash flows using the direct method for the year ended 31 December 2020.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Increases and decreases in the long-term assets are reported on the statement of cash flows as: A.…

A: Long term assets are those which are held and used by an entity for a period of more than one year.…

Q: Discuss the primary differences between U.S. GAAP and IFRS with respect to the statement of cash…

A: GAAP: GAAP stands for “Generally Accepted Accounting Principles”. It provides the accounting rules…

Q: You have been asked to prepare the statement of cash flows for Neo Ltd for the year ended 30…

Q: 10. How much is the adjusted book receipts for December 2020? 11. How much is the adjusted book…

A: Proof of cash is a statement which is prepared to calculate the opening cash balance at just a cash…

Q: 1. What is the definition of a total cash received during the year? How it is important to the to…

A: Approach to Solving the Question:Define Each Concept: Let commence with the description of what each…

Q: Under which of the following situations deposit is considered to be a cash equivalent? I) Assuming…

A: Cash and cash equivalents are the highly liquid investments and have the reputation of insignificant…

Q: Washington Company is preparing its statement of cash flows using the indirect method. Refer to the…

A: A cash flow statement is a part of financial statements to show the cash movement in different…

Q: The measurement of money is related to:

A: The money is measured in quantitative terms only. The qualitative term would not be recorded. The…

Q: Consider the following cash flows: Year Cash Flow 0 −$ 33,500 1 13,500 2 18,200 3 10,900 What is…

A: In finance and investment, IRR is a metric used to evaluate the profitability of an investment. It…

Q: cumulative cash flow means the accumulated effect of cash inflows and to show the overall net…

A: The statement is True.Cumulative cash flow refers to the accumulated effect of cash inflows and…

Q: Identify the three financial statements found in the annual report. a) All b) The statement of cash…

A: Annual report: It is a report which consists of all the activities that it involves into in the…

Q: Draft a concise introduction, some background, and essential information of the cash flow statements…

Q: Please give me an information about : cash reciepts, capital investments, loans, interest payment,…

A: Every feild had its own terminology. Same is with Accounting. Accounting has its own terminology,…

Q: If an investment may be given by the sequence of cash flows Year (n) Cash Flow (C,) -4000 1 1200

A: Internal rate of return or IRR is the rate at which present value of cash inflows is equal to…

Q: Using the indirect method, prepare a statement of cash flow for 2020

A: The cash flow statement is helpful for the stakeholders as they can identify the organization's…

Q: If the cash balance on 31/12/2019 was $ 10000, while on 31/12/2020 the net cash flow from operating…

A: Cash Flow Statement:- It is a statement in which cash inflow or outflow balance from all three…

Q: What is the purpose of the statement of cash flows?

A: Introduction: The internal cash flows the business encounters is not accounted for in the income…

Q: Prepare a statement of cash flows (direct method) for the year 2018. Use the minus sign to indicate…

A: Statement of cash flows: The statement of cash flows records all the sources and use of the cash in…

Q: how to prepare a statement of cash flows in the formats required under FSB 1 and IAS 7 respectively

A: Cash is considered as the most liquid asset or quick asset for the business in the balance sheet of…

Q: lain 5 of t

A: Vertical Analysis of Cash Flow Year ended March 31, 2020 with comparative information of 2019…

Q: In addition to the three basic financial statements, which of the following is also a required…

A: The answer is as fallows

Q: Using the indirect method, prepare the cash flows provided by operating activities section of the…

A: CASH FLOWS FROM OPERATING ACTIVITIES Cash Flows From Operating Activities is a section of Statement…

Q: attps://docs.google.com/forms/d/e/1…

A: Cash flow using indirect method. Using Indirect method, we start computation of cash from operating…

Q: Frontier Rare Coins (FRC) was formed on January 1, 2024. Additional data for the year follow: i…

A: There are three statements of the organization which show different accounting financials. 1. Income…

Q: ear Flow 0 -5000 1 2000 2 4000 3 -1500 4 3000 5 4000 6 -6000 7 9000

A: External rate of return is the modified form of internal rate of return in which it is assumed that…

Q: hat is the operating cash flow for the year 2018?

A: Operating cash flow is the cash flow available from core business activities and it can be obtained…

Q: Discuss the primary differences between U.S. GAAP and IFRS with respect to the income statement,…

A: GAAP: GAAP stands for “Generally Accepted Accounting Principles”. It provides the accounting rules…

Q: Use the following information from Dubuque Company’s financial statements to prepare the operating…

A: Cash from operating activities section of Cash flow statement shows all cash inflows and cash…

Q: statement

Q: Prepare a complete statement of cash flows for 2014 using the indirect method using the information…

A: As requested to solve statement of cash flows so we are answering only that part. Introduction:…

Q: Do we add in notes payable due 2024 into our statement of cashflows when the balance sheet has dates…

A: The cash flow statement is one of the components of the financial statement which is prepared at the…

Q: The total cash count minus the amount of the Change Fund should be equal to: a.the total current…

A: Cash Count represents the total cash at the counter at the end of the day and the change fund is…

Q: A fixed stream of cash flows occurring at the beginning of each period for a fixed period of time is…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: 2 la additin o the three basic financial statements, which of the folowing is also a required…

A: Financial statements are prepared at the end of the year to analyse the financial position and…

Question

a) Prepare a statement of cash flows using the direct method for the year ended 31 December 2020.

The cash flows below were extracted from the accounts of Willow Ltd shop owner. Net
cash equivalent at beginning of period total £160.
3.
Acquisition of subsidiary
Proceeds from issue of share capital
Cash paid to suppliers and employees
Purchase of property, plant and equipment
Proceeds from long-term borrowings
Interest paid
Income taxes paid
Dividends received
Payment of finance lease liabilities
Proceeds from sale of equipment
Cash receipts from customers
550
250
27,600
350
250
270
900
200
90
20
30,150
Interest received
200
Dividends paid
Cash and cash equivalents at end of period (31/12/20)
1,200
270

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

You have been asked to prepare the statement of cash flows for Neo Ltd for the year ended 30 November 2021. The most recent income statement and statement of financial position (with comparatives for the previous year) of Neo Ltd are set out below. Neo Ltd – Income Statement for the year ended 30 November 2021 Revenue 104,567 Cost of sales (71,358) Gross profit 33,209 Profit on disposal of property, plant and equipment 106 33,315 Distribution costs (12,789) Administrative expenses (16,371) Profit from operations 4,155 Finance costs (608) Profit before tax 3,547 Тах (726) Profit for the period 2,821
please determine the rate of return of the cash flows shown in the table below. Year 0 1 2 3 4 Cash flow -3,000 1,000 900 900 900
List the six steps to be followed when preparing a statement of cash flows. Be sure to include all aspects of the statement's preparation.
am. 154.
Distinguish between annual income in the presence of depreciation and annual operating cash flow?
Reconstruct the company’s comparative balance sheet for 2020/2021 using the information in line with your first name initial and compute and show the missing figures to include the appropriate sign as a positive or negative figure. Prepare a complete statement of cash flows for 2021 using the indirect method using the information in line with your first name initial
How do you take the present value of a stream of cash flows. How does it work for annual payments, weekly payments, quarterly payments, and monthly payments? Provide examples of each
In addition to the three basic financial statements, which of the following is also a required financial statement? (C17L01) Select one a the Statement of Cash Flows Ob. the "Cash Reconciliation" the "Cash Budget" d. the Statement of Cash eflows and Outflows
Use the following information from Isthmus Company's financial statements to prepare the operating activities section of the statement of cash flows (indirect method) for the year 2018. What is the net cash flows from operating activities for 2018? Cash Account Receivable Inventory Accounts Payable Salaries Payable Additional information: Net income Depreciation expense $77,600 $45,200 $11,900 $36,000 Dec. 31, 2018 $295,000 45,300 92,200 23,000 1,700 45,200 33,300 Dec. 31, 2017 $259,000 48,700 91,000 26,300 1,500
Please explain how to prepare a statement of cash flows (indirect method) including analyzing tables for a two year period such as : Statement of Cash Flows As of December 31, 2022 and 2021 Please provide an example. Thank you,
What are the operating cash flows in years 1 to 5?
The change in cash for the year can be calculated by comparing the balance of cash reported in this year’s and last year’s balance sheet. Why is the statement of cash flows needed?