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Question
Statement of Cash flows Analysis
Analyze the statement of cash flows of the companies and find the answers of the followings
1. Are cash flows from operations positive? What is the trend for three years?
2. Is operating cash flows smaller or larger than net income?
Step by step
Solved in 2 steps
- (Appendix 21.1) Operating Cash Flows Refer to the information for Lamberson Company in P21-6. Required: 1. Using the direct method, prepare the operating activities section of the 2019 statement of cash flows for Lamberson. 2. (Optional). If you completed P21-6 earlier, prepare the remaining portion of the statement of cash flows. (A separate schedule reconciling net income to cash provided by operating activities is not necessary.)Selected information from Brook Corporations accounting records and financial statements for 2019 follows: On the statement of cash flows for the year ended December 31, 2019, Brook should disclose a net increase in cash in the amount of: a. 1,700,000 b. 2,400,000 c. 3,700,000 d. 4,200,000Scenario: The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. Auga Company Ltd Comparative Balance Sheet December 31, 2021 and 2020 2021 2020 Increase/(Decrease) Assets Cash 215,800 208,300 ? Accounts Receivable 259,300 295,800 ? Inventories 348,800 395,500 ? Prepaid expenses 43,950 30,500 ? Intangible assets 185,450 185,450 ? Plant assets, net 1,000,000 895,500 ?…
- Use the information provided below to prepare the Cash Flow Statement of HarmonyLimited for the year ended 31 December 2020.INFORMATIONThe information provided below was extracted from the accounting records of Harmony Limited on 31 December 2020:Harmony LimitedExtract of Statement of Comprehensive Income for the year ended 31 December 2020RSales 6 600 000Cost of sales (3 900 000)Gross profit 2 700 000Operating expenses (1 710 000)Selling and administrative expenses 1 260 000Depreciation 450 000Operating profit 990 000Interest expense (270 000)Profit before tax 720 000Company tax (240 000)Profit after tax 480 000Extract of Statement of Changes in Equity for the year ended 31 December 2020RetainedearningsRBalance on 01 January 2020 1 500 000Profit after tax 480 000Dividends paid and proposed in 2020 (180 000)Balance on 31 December 2020 1 800 000Balances extracted from the Statement of Financial Position as at 31 December:2020 2019R RPlant and equipment 3 750 000 3 000 000Investments 210…Use the information provided below to prepare the Cash Flow Statement of Rolex Limited for the year ended 31December 2021.INFORMATIONThe following information was extracted from the records of Rolex Limited for the financial year ended 31 December2021.ROLEX LIMITEDSTATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2021RSales 4 140 000Cost of sales (2 020 000)Gross profit 2 120 000Selling and administrative expenses (840 000)Operating profit 1 280 000Interest expense (80 000)Profit before tax 1 200 000Company tax (320 000)Profit after tax 880 000STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:ASSETS 2021 (R) 2020 (R)Non-current assets 3 740 000 2 940 000Property, plant and equipment 3 440 000 2 940 000Investments 300 000 0 Current assets 1 080 000 900 000Inventories 480 000 500 000Accounts receivable 510 000 320 000Cash and cash equivalents 90 000 80 000Total assets 4 820 000 3 840 000EQUITY AND LIABILITIESEquity 3 120 000 2 600 000Ordinary share capital 2 000 000 2…Use the information provided below to prepare the Cash Flow Statement of Umhlali Limited for the year ended 31 December 2020.INFORMATIONThe following Information was extracted from the records of Umhlali Limited for the past two years:STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER:2020 (R)2019 (R)Sales1 856 0001 200 000Cost of sales(1 280 000)(750 000)Gross profit576 000450 000Operating expenses(291 200)(212 000)Depreciation30 00026 000Other operating expenses261 200186 000Operating profit284 800238 000Interest on mortgage loan(24 000)(72 000)Profit before tax260 800166 000Company tax(90 240)(58 100)Profit after tax170 560107 900vmcInformation extracted from the Statement of Financial Position for the past two years:STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER:2020 (R)2019 (R)ASSETSNon-current assets2 464 1602 444 000Fixed assets2 464 1602 444 000Current assets356 000336 000Inventories (all Trading inventory)120 000250 000Accounts receivable40 00064 000Cash &…
- Prepare the Cash Flow Statement for the year ended 31 December 2022 using info below The information given below was extracted from the accounting records of Excellence Limited Information from the Statement of Financial Position as at 2022 R 2021 R Ordinary share capital 750 000 580 000 Retained earnings 145 000 60 000 Property, plant and equipment (see note) 475 000 410 000 Investments 248 000 220 000 12.5% Debentures 125 000 120 000 Inventory 320 000 260 000 Trade debtors 57 000 67 500 Bank ? Prepaid expenses 15 500 2 500 Trade creditors 60 000 85 000 Bank overdraft 50 000 South African Revenue Services 25 000 40 000 Extract from the Statement of Comprehensive Income for the year ended 31 December 2022 Profit before interest and tax 342 000 Depreciation on equipment 25 000 Dividends received on investment 30 000 Interest on debentures 22 500…Required:Prepare Cashflow Statement for the year ended 31 December 2020 using the direct method. The following is an extract from the financial statements of Thandeka (Pty) Ltd for the year ended 31December 2021. Turnover (Sales) 702000 Cost of sales 390000 Gross profit 312000 Other income 2250 Operating expenses 164250 Operating profit 150000 Dividends received 18750 Profit before taxation 168750 Taxation 52500 Dividends 30000 Retained income for the year 86250 Retained income at the beginning of the year 48150 Retained income at the end of the year 134400 Thandeka (Pty) Ltd Statement of Financial Position as at 31 December 2021. ASSETS 2021 2020 Non-current assets 340 500 228 000 Land and buildings 178 500 127 500 Plant and equipment at carrying value 76 500 19 500 Listed investment 85 500 81 000 340 500 228 000 Current assets 181 650 129 750 Inventories 66 150 41 250 Trade debtors 110 250 78 750 Cash and…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…
- React Corporation Comparative Statements of Financial Position December 31, 2025 and 2024 2025 2024 Assets Current Assets Cash & Cash Equivalent 106,789 102,375 Trade & Other Receivables 327,611 277,467 Inventory 331,863 297,654 Prepaid Expenses 101,565 114,813 Total Current Assets 870,828 792,309 Noncurrent Assets Property, Plant & Equipment Intangibles 135,754 166,481 Total Noncurrent Assets 7,500 7,500 TOTAL ASSETS 143,254 173,981 1,014,082 966,290 Liabilities and Shareholders’ Equity Current Liabilities Trade & Other Payables Unearned Revenues 238,000 208,703 Notes Payables - current 107,508 82,456 Total Current Liabilities 45,000 45,000…Statement of Cash Flows (Indirect Method) The Forrester Company’s income statement and comparative balance sheets as of December 31 of 2019 and 2018 are shown below: FORRESTER COMPANYIncome StatementFor the Year Ended December 31, 2019 Sales Revenue $660,000 Cost of Goods Sold $376,000 Wages Expense 107,000 Depreciation Expense 22,000 Rent Expense 28,000 Income Tax Expense 24,000 557,000 Net Income $103,000 FORRESTER COMPANYBalance Sheets Dec. 31, 2019 Dec. 31, 2018 Assets Cash $58,000 $30,000 Accounts Receivable 52,000 60,000 Inventory 142,000 120,000 Prepaid Rent 16,000 10,000 Plant Assets 420,000 301,000 Accumulated Depreciation (127,000) (105,000) Total Assets $561,000 $416,000 Liabilities and Stockholders’ Equity Accounts Payable $29,000 $17,000 Wages Payable 14,000 9,000 Income Tax Payable 7,000 8,000 Common Stock 295,000 252,000 Paid-in-Capital in Excess of Par Value 72,000 58,000 Retained…Flint CorporationStatement of Cash FlowsFor the Year Ended January 31, 2022 Sources of cash From sales of merchandise $381,940 From sale of capital stock 401,520 From sale of investment (purchased below) 79,460 From depreciation 55,130 From issuance of note for truck 20,100 From interest on investments 6,046 Total sources of cash 944,196 Uses of cash For purchase of fixtures and equipment 320,190 For merchandise purchased for resale 259,438 For operating expenses (including depreciation) 170,900 For purchase of investment 74,360 For purchase of truck by issuance of note 20,100 For purchase of treasury stock 9,930 For interest on note payable 2,982 Total uses of cash 857,900 Net increase in cash $86,296 Pete claims that Flint Corporation’s statement of cash flows is an excellent…