Question 2 Simone Gabby owns and operates Simone's Shoes, a small business that prepares reports on a monthly basis. The Cash Journals for August 2019 appear as follows. Cash Receipts Journal (summary) Disc. Accounts Date Details Rec. Bank Sales Sundries GST Еxp. Receivable 31/08 Totals 13 783 154 7 700 5 670 567 Cash Payments Journal (summary) Disc. Асcounts Date Details Chq. Bank Inventory Wages Sundries GST Rev. Payable 31/08 Totals 18 030 44 2 200 3 000 2 730 9 547 597 The items in the Sundries column include: Advertising $540 Drawings $5 000 Freight Inwards $440 Freight Outwards $190 GST Settlement $927 Interest Expense $150 Loan – ANZ Bank $500 Rent $1 800 a. Prepare the Net Cash Flow from Operations extract from the Cash Flow Statement for the month ending 31 August 2019. b. Explain how Simone’s Shoes’ Income Statement for the month ended 31 August 2019 reported a Net Profit yet the Cash Flow Statement reported a Net Decrease in Cash for the same period.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 2
Simone Gabby owns and operates Simone's Shoes, a small business that prepares reports on a
monthly basis.
The Cash Journals for August 2019 appear as follows.
Cash Receipts Journal (summary)
Disc.
Accounts
Date
Details
Rec.
Bank
Sales
Sundries
GST
Еxp.
Receivable
31/08
Totals
13 783
154
7 700
5 670
567
Cash Payments Journal (summary)
Disc.
Асcounts
Date
Details
Chq.
Bank
Inventory
Wages
Sundries
GST
Rev.
Payable
31/08
Totals
18 030
44
2 200
3 000
2 730
9 547
597
The items in the Sundries column include:
Advertising
$540
Drawings
$5 000
Freight Inwards
$440
Freight Outwards
$190
GST Settlement
$927
Interest Expense
$150
Loan – ANZ Bank
$500
Rent
$1 800
a. Prepare the Net Cash Flow from Operations extract from the Cash Flow Statement for the month
ending 31 August 2019.
b. Explain how Simone’s Shoes’ Income Statement for the month ended 31 August 2019 reported a
Net Profit yet the Cash Flow Statement reported a Net Decrease in Cash for the same period.
Transcribed Image Text:Question 2 Simone Gabby owns and operates Simone's Shoes, a small business that prepares reports on a monthly basis. The Cash Journals for August 2019 appear as follows. Cash Receipts Journal (summary) Disc. Accounts Date Details Rec. Bank Sales Sundries GST Еxp. Receivable 31/08 Totals 13 783 154 7 700 5 670 567 Cash Payments Journal (summary) Disc. Асcounts Date Details Chq. Bank Inventory Wages Sundries GST Rev. Payable 31/08 Totals 18 030 44 2 200 3 000 2 730 9 547 597 The items in the Sundries column include: Advertising $540 Drawings $5 000 Freight Inwards $440 Freight Outwards $190 GST Settlement $927 Interest Expense $150 Loan – ANZ Bank $500 Rent $1 800 a. Prepare the Net Cash Flow from Operations extract from the Cash Flow Statement for the month ending 31 August 2019. b. Explain how Simone’s Shoes’ Income Statement for the month ended 31 August 2019 reported a Net Profit yet the Cash Flow Statement reported a Net Decrease in Cash for the same period.
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