The comparative statement of financial position for Charmaine Retailers Ltd. fol
ID: 2512614 • Letter: T
Question
The comparative statement of financial position for Charmaine Retailers Ltd. follows CHARMAINE RETAILERS LTD. Statement of Financial Position December 31 Assets Cash Accounts receivable Merchandise inventory Furniture Accumulated depreciation Total assets 2014 42,840 81,600 2015 $ 18,360 $ 9,180 171,360 145,860 (45,900 (24,480 51,000 166,260 $361,080 $255,000 Liabilities and Shareholders' Equity Accounts payable Bank loan payable (noncurrent) Common shares Retained earnings Total liabilities and shareholders' equity $361,080 $ 45,900 $ 35,700 77,520 61,200 56,100 148,92085,680 $255,000 105,060 Additional information 1. Profit was $63,240 in 2015 2. Depreciation expense was $21,420 in 2015 3. Payments made to the bank pertaining to the bank loan were $10,200 in 2015. Some new loans were obtained that year 4. Common shares were issued in 2015 and no shares have been bought back by the company 5. In 2015, no furniture was sold Prepare a statement of cash flows using the indirect method for 2015. (Show amounts that decrease cash flow with either a -sign e.g. -15,000 or in parenthesis e.g. (15,000).)Explanation / Answer
CHARMAINE RETAILERS LTD. Statement of Cash Flows - Indirect method Year Ended December 31, 2015 Cash flows from operating activities: Net income $63,240 Adjustments to reconcile net income Depreciation expense $21,420 Accounts receivable increase -$8,160 Merchandise Inventory increase -$25,500 Accounts payable increase $10,200 -$2,040 Net cash provided by operating activities $61,200 Cash flows from investing activities Purchase of Furniture -$84,660 Net cash used by investing activities -$84,660 Cash flows from financing activities Borrowed - Bank Loan $37,740 Repayment - Bank Loan -$10,200 Cash dividends paid $5,100 Net cash provided by financing activities $32,640 Net increase in cash $9,180 Cash, Jan 1, 2015 $9,180 Cash, December 31, 2015 $18,360