Cash flow statement is that statement in which, transaction related to cash are recorded. It is mandatory report and included in the financial statement of the company. It is divided into three parts operating activities, investing activity, and financial activity
Operating Activity:
Operating activity is the first part of the cash flow statement. The main focuses of the operating activity on the
Financing Activity:
Financing activity is the part of the cash flow statement. Financing activity involves the long term liability, borrowing and
Investing Activity:
Investing activity is the third part of the cash flow statement which gives the information related to the acquisition and disposal of the long term assets of the company such as land and building, investment and plant.
To prepare: Cash flow statement by direct method.
Explanation of Solution
Statement of cash flow
|
Particulars |
Amount ($) |
|
Cash flow from operating activities: |
|
|
Receipts from customers |
5,000,000 |
|
Payment for inventory |
(2,590,000) |
|
Payment for wages |
(550,000) |
|
Payment for rent |
(320,000) |
|
Payment for tax |
(450,000) |
|
Net cash flow from operating activities:(A) |
1,090,000 |
|
Cash flow from investing activities : |
|
|
Receipts from land sale |
220,000 |
|
Receipts from machinery sale |
710,000 |
|
Payment for machinery |
(2,236,000) |
|
Payments for long term investments |
(1,260,000) |
|
Net cash from investing activities:(B) |
(2,566,000) |
|
Cash flow from financing activities: |
|
|
Receipts from dividends |
208,400 |
|
Receipts from issuing stock |
1,540,000 |
|
Receipts from borrowing |
3,600,000 |
|
Payment for interest |
(218,000) |
|
Payment for notes payable |
(386,000) |
|
Payment for dividends |
(500,000) |
|
Payment for |
(218,000) |
|
Net cash flow from financing activities:(C) |
4,026,400 |
|
Net decrease in cash
|
2,550,400 |
|
Add: Cash opening balance |
333,000 |
|
Cash ending balance |
2,883,400 |
Table (1)
Want to see more full solutions like this?
Chapter 12 Solutions
Loose-Leaf for Financial and Managerial Accounting
- What is the company's cost of goods manufactured for the year of this general accounting question?arrow_forwardExercise 2 Make an Excel spreadsheet to compute gross wages due each employee under federal wage-hour law. See notes below. Ryan is normally paid $1,000 for a 40-hour workweek. One week, he works 46 hours. 2.Latisha is normally paid $1,200 for a 40-hour workweek. One Monday she is out sick but receives 8 hours sick pay. She then works 40 hours Tuesday–Friday. 3. Al is normally paid $500 for a 40-hour workweek. One week, he works 45 hours. 4. Lee is normally paid $1,500 for a 40-hour workweek. To make up for leaving early one Friday, he works 44 hours this week.arrow_forwardHello tutor please provide this question solution general accountingarrow_forward
- Get accurate answer of this financial accounting questionarrow_forwardThe cost of goods sold isarrow_forwardRequired information [The following information applies to the questions displayed below.] Kitimat Company manufactures winter hats that sell for $42 per unit. The following information pertains to the company's first year of operations in which it produced 40,100 units and sold 37,600 units. Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses 16 $ 16 $ $ 1 $ 2 $401,000 $247,000 9. What would have been the company's variable costing operating income if it had produced and sold 37,600 units?arrow_forward
- Required information [The following information applies to the questions displayed below.] Kitimat Company manufactures winter hats that sell for $42 per unit. The following information pertains to the company's first year of operations in which it produced 40,100 units and sold 37,600 units. Variable costs per unit: Manufacturing: Direct materials Direct labour Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 16 LA LA LA LA $ $ 6612 $401,000 $247,000 4. What is the company's operating income under variable costing?arrow_forwardDo fast answer of this general accounting questionarrow_forwardUsing the high-low method, estimate a cost formula for power cost. ??arrow_forward
- Jorgansen Lighting, Incorporated, manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data: Inventories: Beginning (units) Ending (units) Variable costing operating income Year 1 Year 2 Year 3 310 260 260 290 290 350 $ 1,091,400 $ 1,043,400 $ 1,007,400 The company's fixed manufacturing overhead per unit was constant at $670 for all three years. Required: 1. Determine each year's absorption costing operating income. Note: Enter any losses or deductions as a negative value. Reconciliation of Variable Costing and Absorption Costing Operating Incomes Year 1 Year 2 Year 3 Variable costing operating income Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing Absorption costing operating incomearrow_forwardCalculate Dynamic's net income for the year ??arrow_forwardProvide correct option general accounting questionarrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education