Net cash flows from operating activities Term Paper - 1925 Words

Net cash flows from operating activities (Term Paper Sample) Content: BA214 AssignmentAuthor NameInstitution NameQuestion 1 2014 2013 $ $ Sales revenue 185,000 160,000 Less discount allowed (1,000) (800) Total Sales 184,000 159,200 Cost of sales (145,000) (120,000) Gross Profit 39,000 39,200 Other income:- Discount received 1,500 1,200 Total Income 40,500 40,400 Other expenses:- Bad debt expense 700 500 Net profit before tax 39,800 39,900 Statement of Cash flows Profit before tax 39,800 39,900 Statement of changes in working capital:- Decrease / (increase) in accounts receivable 8,500 (11,000) Increase in inventories (2,000) (6,000) Increase in accounts payables 6,000 13,000 Net cash flows from operating activities 52,300 35,900 * Cash receipt from customers in 2014 =Net sales + Decrease in accounts receivables=$184,000+8,500=192,500 * Cash paid to suppliers in 2014 =Net purchases + (closing inventory-opening in ventory) +(opening Accounts Payables-closing Accounts Payables)=$145,000-1500+ (8,000-6,000)+(13,000-19,000)=$139,500Question 2:Windows LimitedStatement of cash flows (Direct method)For the year ended 30 June 2013 2013 $ Cash receipts:- From customers 1,002,000 Operating expenses (149,000) Cash payments:- to suppliers (786,000) Interest (5,000) Income taxes (14,000) Net cash flows from operating activities 48,000 INVESTMENT ACTIVIES Purchase of property and equipment (38,000) Increase in available for sale investments (7,000) Increase in revaluation reserve 5,000 Net cash flows to investing activities (40,000) FINANCING ACTIVITIES Proceeds from borrowings 20,000 Dividends paid (38,000) Net cash flows from financing activities (18,000) Net increase in cash and cash equivalents (10,000) Cash and cash equivalents as at 01 July 45,000 Cash and cash equivalents at 30 June 2013 35,000 Windows LimitedStatement of cash flows (In direct Method)For the year ended 30 June 2013 2013 OPERATING ACTIVITIES $ Profit before taxation 82,000 Adjusted for:- Depreciation 18,000 Deferred tax 7,000 Interest paid (5,000) Operating profit before working capital changes 102,000 Changes in working capital:- increase in accounts receivable (net of bad debts) (28,000) increase in inventories (22,000) Increase in accounts payable 10,000 Net cash flows from operating activities 62,000 Tax paid (14,000) INVESTMENT ACTIVIES Purchase of property and equipment (38,000) Increase in revaluation reserve 5,000 increase in available for sale investments (7,000) Net cash flows to investing activities (40,000) FINANCING ACTIVITIES Proceeds from borrowings 20,000 Dividends paid (38,000) Net cash flows from financing activities (18,000) Net increase in cash and cash equivalents (10,000) Cash and cash equivalents as at 30 June 2012 45,000 Cash and cash equivalents at 30 June 2013 35,000 Workings to the cash flows:-Interest Account Cash 5,000 Balance B/f 5,000 Balance c/d 7,000 Interest exp 7,000 12,000 12,000 Current tax payable Cash 14,000 Balance B/f 15,000 Balance c/d 18,000 Income tax exp 17,000 32,000 32,000 Investment revaluation reserve Balance B/f 2,000 Balance c/d 7,000 Revaluation 5,000 7,000 7,000 Borrowings Balance B/f 80,000 Bal c/d 100,000 Proceeds 20,000 100,000 100,000 Cash receipts from customers Balance B/f 66,000 Cash 1,002,000 Net sales 1,035,000 Bal c/d 99,000 1,101,000 1,101,000 Cash payments to suppliers Cash 786,000 Balance B/f 65,000 Opening stock 45,000 Closing stock 67,000 Balance c/d 75,000 Purchases 774,000 906,000 906,000 Property and equipment Balance b/f 187,000 Cash 38,000 Balance c/d 225,000 225,000 60,000 Cash paid for operating expenses Depreciation 18,000 Bad debts 5,000 Cash 149,000 Oprtng exps 172,000 172,000 1 72,000 Question 3