Required: (a) Prepare Vanguard low Statement for the year ended 31 December 2019 with the following classifications using the direct method: (i) Cash flows from operations; (ii) Cash flows from investing activities; (iii) Cash flows from financing activities. (b) Discuss the importance of analysing the cash flow statement. (c) Explain why it is possible to have a negative cash flow from operations but a positive net income. Give an example of such a scenario.
Required: (a) Prepare Vanguard low Statement for the year ended 31 December 2019 with the following classifications using the direct method: (i) Cash flows from operations; (ii) Cash flows from investing activities; (iii) Cash flows from financing activities. (b) Discuss the importance of analysing the cash flow statement. (c) Explain why it is possible to have a negative cash flow from operations but a positive net income. Give an example of such a scenario.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(a) Prepare Vanguard low Statement for the year ended 31 December 2019 with the following classifications using the direct method:
(i)
(ii) Cash flows from investing activities;
(iii) Cash flows from financing activities.
(b) Discuss the importance of analysing the cash flow statement.
(c) Explain why it is possible to have a negative cash flow from operations but a positive net income. Give an example of such a scenario.
![The cash flow data of Vanguard Bhd. for the year ended 31 December 2019 is as follows:
RM
Cash payment of dividends
(50,050)
(20,020)
(14,300)
(64,350)
54,340
(35,750)
(42,900)
(121,550)
357,500
Purchase of land
Cash payment of interest
Cash payment of salaries
Sale of equipment
Share buyback
Purchase of equipment
Cash payment to suppliers
Cash collections from customers
Cash balance as at 1st January 2019
71,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F10c6e430-432f-454a-94a6-c9528fe0bafe%2F7326801f-71fc-47ce-810a-0ca4c63d721d%2F1n6ufhg_processed.png&w=3840&q=75)
Transcribed Image Text:The cash flow data of Vanguard Bhd. for the year ended 31 December 2019 is as follows:
RM
Cash payment of dividends
(50,050)
(20,020)
(14,300)
(64,350)
54,340
(35,750)
(42,900)
(121,550)
357,500
Purchase of land
Cash payment of interest
Cash payment of salaries
Sale of equipment
Share buyback
Purchase of equipment
Cash payment to suppliers
Cash collections from customers
Cash balance as at 1st January 2019
71,500
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