Starz Inc. uses the direct method to prepare its statement of cash flows. The following comparative statement of financial position for 2021 and 2022 were presented: Property, Plant and Equipment. (PPE) Accumulated depreciation Patent Prepaid expenses Inventory Accounts receivable Cash Accounts payable Accrued liabilities Mortgage payable Share capital-Preference Share capital-Ordinary Retained earnings Sales Cost of sales Gross profit Operating expenses Net income Required: Cash Received from Customer Total Cash paid to suppliers The statement of profit or loss for 2022 was as follows: Net cash activities $ Cash flows from operating activities Cash received from customers Net Cash Additional Information: 1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period. 2. The Retained Earnings account has been charged for dividends of $138 000 and credited for the net income for the year. Cash paid for operating expenses activities Net cash activities Net Cash flows from investing activities of PPE Total a) Complete the 'Necessary Workings' schedule below. Note: The applicable figures being used in the workings must be listed in the fields in the respective column, in strict descending order For example, $10 000 - $7 000+ $2 500 OR $32 000-$11 000 - $6 000. • If a field provided under the column is not required in the workings, place zero in the field. Do not leave any fields in the columns blank Cash flows from financing activities of cash dividend by operating Cash, January 1, 2022 At December 31 2022 by investing Cash, December 31, 2022 of mortgage payable of preference shares $1 260 000 in cash (450 000) 153 000 18 000 000 Necessary Workings Schedule Cash Paid to Suppliers by financing 150 159 000 297.000 $1 587 000 b) Prepare a statement of cash flows (direct method) for Starz Inc. for the year ended December 31, 2022. $153 000 60 000 645 000 600 000 129 000 $1.587 000 $ $1 980 000 1 089 000 891 000 690 000 $ 201 000 Starz Inc. Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2022 2021 $1 050 000 (375 000) 174 000 27 000 180 000 117 000 153 000 $1 326 000 $168 000 42 000 450 000 600 000 66 000 $1326 000 $ Cash Paid for Operating Expenses Total $ $ 2/4 3/4
Starz Inc. uses the direct method to prepare its statement of cash flows. The following comparative statement of financial position for 2021 and 2022 were presented: Property, Plant and Equipment. (PPE) Accumulated depreciation Patent Prepaid expenses Inventory Accounts receivable Cash Accounts payable Accrued liabilities Mortgage payable Share capital-Preference Share capital-Ordinary Retained earnings Sales Cost of sales Gross profit Operating expenses Net income Required: Cash Received from Customer Total Cash paid to suppliers The statement of profit or loss for 2022 was as follows: Net cash activities $ Cash flows from operating activities Cash received from customers Net Cash Additional Information: 1. The Accumulated Depreciation account has been credited only for the depreciation expense for the period. 2. The Retained Earnings account has been charged for dividends of $138 000 and credited for the net income for the year. Cash paid for operating expenses activities Net cash activities Net Cash flows from investing activities of PPE Total a) Complete the 'Necessary Workings' schedule below. Note: The applicable figures being used in the workings must be listed in the fields in the respective column, in strict descending order For example, $10 000 - $7 000+ $2 500 OR $32 000-$11 000 - $6 000. • If a field provided under the column is not required in the workings, place zero in the field. Do not leave any fields in the columns blank Cash flows from financing activities of cash dividend by operating Cash, January 1, 2022 At December 31 2022 by investing Cash, December 31, 2022 of mortgage payable of preference shares $1 260 000 in cash (450 000) 153 000 18 000 000 Necessary Workings Schedule Cash Paid to Suppliers by financing 150 159 000 297.000 $1 587 000 b) Prepare a statement of cash flows (direct method) for Starz Inc. for the year ended December 31, 2022. $153 000 60 000 645 000 600 000 129 000 $1.587 000 $ $1 980 000 1 089 000 891 000 690 000 $ 201 000 Starz Inc. Statement of Cash Flows (Direct Method) For the Year Ended December 31, 2022 2021 $1 050 000 (375 000) 174 000 27 000 180 000 117 000 153 000 $1 326 000 $168 000 42 000 450 000 600 000 66 000 $1326 000 $ Cash Paid for Operating Expenses Total $ $ 2/4 3/4
Chapter1: Financial Statements And Business Decisions
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