Cash Accounts receivables Merchandise inventory Prepaid expenses Equipment Accum
ID: 2415858 • Letter: C
Question
Cash Accounts receivables Merchandise inventory Prepaid expenses Equipment Accumulated Depreciation-Equipment Patent Total Assets Accounts Payable Income taxes payable Dividends payable Bonds payable Common stock, $ 10 par Paid in excess of par Retained earnings Treasury stock Total liabilities and equality Sales Cost of goods sold Other operating expenses Patent Amortization Depreciation expense Other gains(losses) Gain on sale of equipment Gain on retirement of bonds Income before taxes Income tax expense Net income Equipment costing $ 21,375 with accumulated depreciation of $ 11,100 is sold for cash. Company issued 950 shares at $ 15 in FY 2008. All sales are made on credit. All merchandise inventory purchases are on credit. Account payable balances result from merchandise inventory purchases. All purchases of Long Term Assets are for cash. 2,500 shares of common stock were issued at 40 in exchange for the bonds payables. Company purchase 400 of its common stock for $ 15.00 per share.Explanation / Answer
Particulars
Year ended 31.12.2008
A: CASH FLOWS FROM OPERATING ACTIVITIES:
Net Profit/(Loss) before taxation, and extraordinary item
69,625
Adjustments for:
Current Period / year Depreciation
38,000
Movement in Provision for Anticipated Losses &
Defect Liability period/ supply of spares
Provision for leave encashment
Provision for gratuity
Profit on sale of Asset
(3,300)
Profit on Disposal of Bonds
(825)
Interest Cost
Interest Income
Excess provision written back
Operating Profit before Working Capital changes
1,03,500
Adjustments for:
Increase in Trade receivables
(5,700)
Decrease in Inventories
9,525
Increase in Trade payables
(4,950)
Increase in other Current Assets
-
Increase in Liabilities & Provisions
Cash Generated from Operations
1,02,375
Less: Income Taxes paid
14,400
Cash Before Extraordinary items
87,975
Less: Extra ordinary items
Net Cash from Operating activities
87,975
B: CASH FLOWS FROM INVESTMENT ACTIVITIES:
Sale of Fixed Assets
13,575
Investment in Fixed deposits
-
Advance paid for Construction of Factory
-
Proceeds from Sale of Fixed Assets
Interest Received
-
Net Cash used in Investing activities
13,575
C: CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issue of Share Capital
14,250
Proceeds from Buy Back
(6,000)
Proceeds from Borrowings
-
Repayment of loan
(36,675)
Others
(87,975)
Dividend Paid
(4,500)
Net Cash Flow from Financing Activities
(1,20,900)
D. Net Increase /(Decrease) in Cash and Cash Equivalents:
(19,350)
Cash and Cash Equivalent as at 01/01/2008
23,925
Cash and Cash Equivalent as at 31/12/2008
4,575
Particulars
Year ended 31.12.2008
A: CASH FLOWS FROM OPERATING ACTIVITIES:
Net Profit/(Loss) before taxation, and extraordinary item
69,625
Adjustments for:
Current Period / year Depreciation
38,000
Movement in Provision for Anticipated Losses &
Defect Liability period/ supply of spares
Provision for leave encashment
Provision for gratuity
Profit on sale of Asset
(3,300)
Profit on Disposal of Bonds
(825)
Interest Cost
Interest Income
Excess provision written back
Operating Profit before Working Capital changes
1,03,500
Adjustments for:
Increase in Trade receivables
(5,700)
Decrease in Inventories
9,525
Increase in Trade payables
(4,950)
Increase in other Current Assets
-
Increase in Liabilities & Provisions
Cash Generated from Operations
1,02,375
Less: Income Taxes paid
14,400
Cash Before Extraordinary items
87,975
Less: Extra ordinary items
Net Cash from Operating activities
87,975
B: CASH FLOWS FROM INVESTMENT ACTIVITIES:
Sale of Fixed Assets
13,575
Investment in Fixed deposits
-
Advance paid for Construction of Factory
-
Proceeds from Sale of Fixed Assets
Interest Received
-
Net Cash used in Investing activities
13,575
C: CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issue of Share Capital
14,250
Proceeds from Buy Back
(6,000)
Proceeds from Borrowings
-
Repayment of loan
(36,675)
Others
(87,975)
Dividend Paid
(4,500)
Net Cash Flow from Financing Activities
(1,20,900)
D. Net Increase /(Decrease) in Cash and Cash Equivalents:
(19,350)
Cash and Cash Equivalent as at 01/01/2008
23,925
Cash and Cash Equivalent as at 31/12/2008
4,575