(Appendix 21.1) Operating Cash Flows Refer to the information for Lamberson Company in P21-6.
Required:
Prepare the operating activities section under direct method of L Company for the year 2019.
Statement of cash flows: Cash flow statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities.
Operating Activities: Operating activities include cash inflows and outflows from business operations.
Prepare the operating activities section under direct method:
L Company | ||
Statement of cash flows for the year, 2019 | ||
Particulars | Amount($) | Amount($) |
Operating Activities: | Â | Â |
Cash inflows: | Â | |
Collection from customers(Working note 1) | 40,040 | Â |
Dividends collected | 820 | Â |
Cash inflows from operating activities | Â | 40,860 |
Cash outflows: | Â | |
Payments to suppliers(Working note 2) | (19,350) | Â |
Payment to employees(Working Note 3) | (11,450) | Â |
Other operating payments(Working Note 4) | (1,410) | Â |
Payments of income taxes (Working Note 5) | (1,550) | Â |
Cash outflows for operating activities | Â | (33,760) |
Net cash provided by operating activities | Â | 7,100 |
Table (1)
Working note 1: Calculate the cash collection from customers.
Working note 2: Calculate payments made to suppliers.
Working note 3: Calculate the payments to employees
2.
Prepare the remaining sections in the cash flow statement of L Company for the year 2019.
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