Net cash flows from operating activities (Term Paper Sample)

BA214 Assignment
Author Name
Institution Name
Question 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 inventory) +(opening Accounts Payables-closing Accounts Payables)
=$145,000-1500+ (8,000-6,000)+(13,000-19,000)
=$139,500
Question 2:
Windows Limited
Statement 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 Limited
Statement 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

172,000

Question 3