Decrease in payables (32 000) Cash generated from operations 540 000 Interest paid Dividends paid (120 000) Income tax paid (96 000) Cash flows from investing activities (448 000) (328 000) Non-current assets purchased Increase in investments (120 000) Cash flows from financing activities 160 000 Increase in long-term borrowings 160 000 Net increase in cash and cash equivalents 4 000 Cash and cash equivalents at beginning of the year
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Question 1.2
I could only attach 2 pictures, the last picture has only 1 column "Cash and cash equivalent alent at the end of the year R36000"
Calculate the amount of interest paid for the year ended 31 December 2020
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100%
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Decrease in payables
(32 000)
Cash generated from operations
540 000
Interest paid
?
Dividends paid
(120 000)
Income tax paid
(96 000)
Cash flows from investing activities
(448 000)
(328 000)
Non-current assets purchased
Increase in investments
(120 000)
Cash flows from financing activities
160 000
Increase in long-term borrowings
160 000
Net increase in cash and cash equivalents
4 000
Cash and cash equivalents at beginning of the year
08:37
22°C
ENG
2021/11/23
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5 €
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9](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F54b8b6c7-b405-4454-bb2b-0c91f06fd4db%2F485822a6-660e-4c2e-b549-7c5fd04219f2%2Fxlid9ix_processed.jpeg&w=3840&q=75)
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INFORMATION
MUSTANG LIMITED
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2020
Cash flows from operating activities
292 000
Profit before interest and tax/Operating profit
512 000
Depreciation
128 000
640 000
Profit before working capital changes
Working capital changes
(100 000)
8 000
Decrease in inventory
Increase in receivables
(76 000)
Decrease in payables
(32 000)
08:33
22°C Rain
ENG
2021/11/23
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