The 2014 comparative balance sheet and 2014 income statement of Simple Things Industries 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. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information.   Requirements    1.Reconstruct the company’s comparative balance sheet for 2013/2014 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure. 2.Which category of the statement of cash flow is considered as the most important? Why? 3. Prepare a complete statement of cash flows for 2014 using the indirect method using the information.

Question

The 2014 comparative balance sheet and 2014 income statement of Simple Things Industries 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.

The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information.

 

Requirements 

 

1.Reconstruct the company’s comparative balance sheet for 2013/2014 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.

2.Which category of the statement of cash flow is considered as the most important? Why?

3. Prepare a complete statement of cash flows for 2014 using the indirect method using the information.

 

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Cash Flow Statements

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