Statement of Cash Flows The following is a list of the items to be included in the preparation of Trone Company’s 2019 statement of cash flows:
Required:
1.
Prepare the statement of cash flow for the year ended December 31, 2019.
Statement of cash flows: This 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.
Provide the statement of cash flow for the year ended December 31, 2019:
T Company | ||
Statement of cash flow for the year ended December 31, 2019 | ||
Particulars | Amount($) | Amount($) |
Operating Activities: | Â | Â |
Net income | 49,200 | Â |
Adjustment for non-cash income items: | Â | Â |
Add: Depreciation expenses | 10,700 | Â |
Loss on sale of investment | 4,800 | Â |
Less: Ordinary gain | 9,200 | Â |
Amortization of premium on bonds payable | (2,100) | Â |
Decrease in deferred taxes payable | (3,600) | Â |
Adjustments for cash flow effects from working capital items: | Â | Â |
Decrease in accounts receivable | 5,000 | Â |
Increase in inventory | (6,700) | Â |
Decrease in accounts payable | (4,000) | Â |
Net cash provided by operating activities | Â | 44,100 |
Investing Activities: | Â | Â |
Payment for purchase of plant | (19,800) | Â |
Payment for purchase of equipment | (39,400) | Â |
Proceeds from sale of investment |
2.
Explain the effect on company’s debt ratio by not issuing the note.
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