(a) Introduction: Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet . Depreciation charged on the tangible assets. Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright. To choose: What is the amount of depreciation and amortization expense that each company reported for the 3 year?

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REQUIRED Study the statement of cash flows of Mantis Limited for the year ended 31 December 2021 and answer the following questions: Calculate the following for the year ended 31 December 2021: Depreciation Dividends paid Of what significance is this statement of cash flows to the shareholders of Mantis Limited? Comment on the following: Cash flows from operating activities (R181 800) 1.3.2. Increase in inventory (R808 000) Increase in receivables (R606 000) Interest paid (R80 800) Cash flows from investing activities (R2 343 200) INFORMATION MANTIS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021 R Cash flows from operating activities (181 800) Operating profit 979 700 Depreciation ? Profit before working capital changes ? Working capital changes (808 000) Increase in inventory (808 000) Increase in receivables…

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

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REQUIRED Study the statement of cash flows of Mantis Limited for the year ended 31 December 2021 and answer the following questions: Calculate the following for the year ended 31 December 2021: Depreciation Dividends paid Of what significance is this statement of cash flows to the shareholders of Mantis Limited? Comment on the following: Cash flows from operating activities (R181 800) 1.3.2. Increase in inventory (R808 000) Increase in receivables (R606 000) Interest paid (R80 800) Cash flows from investing activities (R2 343 200) INFORMATION MANTIS LIMITED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021 R Cash flows from operating activities (181 800) Operating profit 979 700 Depreciation ? Profit before working capital changes ? Working capital changes (808 000) Increase in inventory (808 000) Increase in receivables…

Use the information provided below to prepare the Cash Flow Statement of Chelsea Limited for the year ended 31 December 2021 using the answer template provided (see images) Additional information: (See images)¦ Selling and administrative expenses include depreciation as follows:Depreciation on buildings R96 000Depreciation on plant and machinery R160 000¦ There were purchases but no disposals of property, plant and equipment for the financial year ended 31 December2021.¦ Total dividends for the year ended 31 December 2021 and 31 December 2020 amounted toR288 000 and R388 000 respectively.¦ Inventories on 31 December 2019 amounted to R560 000.¦ All purchases and sales of inventories were on credit.¦ The number of shares in issue was 400 000.¦ Credit terms from creditors are 90 days.

Using the financial statements and additional information below, prepare a cash flow statement for Papa Ltd for the year ended 31st December 2018 using the indirect method of calculating operating cash flow and write a brief comment on the cash flow for the period. Papa Ltd Statement of Profit or Loss Account for the year ended 31st December 2018 GHC Revenue 540,000 Cost of sales (155,000) Gross profit 385,000 Investment income – interest received 15,000 Loss on disposal of equipment (18,000) Depreciation (94,000) Administrative and selling expenses (25,000) Operating profit before interest 263,000 Interest expense (10,000) Profit before taxation 253,000 Taxation (56,000) Profit after tax 197,000 Statement of financial position as at 31st December 2018 2017 GHC GHC Non-current assets Vehicle at cost 180,000 150,000 Accumulated depreciation (137,000)…

Answer 2

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Expert Solution & Answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Expert Solution & Answer

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Answer 5

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Answer 6

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

Answer 7

Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

Answer 8

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

Answer 9

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

Answer 10

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Answer 11

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?

Answer 12

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Ch. 7 - Prob. 1DQ Ch. 7 - Prob. 2DQ Ch. 7 - How does the cost concept affect accounting for...Ch. 7 - Prob. 4DQ Ch. 7 - Prob. 5DQ Ch. 7 - Prob. 6DQ Ch. 7 - What factors must be known or estimated in order...Ch. 7 - How do the accelerated and straight-line...Ch. 7 - Prob. 9DQ Ch. 7 - Prob. 10DQ

Solution Summary: The author explains that depreciation is the non-cash expense, which is shown in the debit side of the profit and loss accounts, and reduced from the assets form the balance sheet.

Chapter 7 Solutions