Question

Tiger Trade has the following cash transactions for the period. Accounts Amounts $ 32,000 Cash received from sale of products to customers Cash received from the bank for long-term loan Cash paid to purchase factory equipment Cash paid to merchandise suppliers Cash received from the sale of an unused warehouse 37,000 (42,000) (10,400) 11, 400 (22, 400) (2,400) 22,000 (4, 400) Cash paid to workers Cash paid for advertisement Cash received for sale of services to customers Cash paid for dividends to stockholders Assume the balance of cash at the beginning of the period is $3,400. Required: 1. Calculate the ending balance of cash. Ending balance

Answer 1

1.

Beginning cash balance	$3,400
Add: Cash receipts:
Sale of products to customers	32,000
Long term loan	37,000
Sale of unused warehouse	11,400
Sale of services to customers	22,000
Total cash receipts	105,800
Less: Cash payments:
Purchase of factory equipment	-42,000
Merchandise suppliers	-10,400
Payment to workers	-22,400
Payment for advertisement	-2,400
Dividends to stockholders	-4,400
Total cash payments	-81,600
Ending cash balance	$24,200

2.

TIGER TRADE Statement of Cash Flow
Cash from operating activities:
Cash inflows:
From sale of products to customers	$32,000
From sale of services to customers	22,000
	54,000
Cash outflows:
For merchandise suppliers	10,400
For workers	22,400
For advertisement	2,400
	(35,200)
Net cash flow from operating activities		18,800
Cash flow from investing activities:
Purchase of factory equipment	(42,000)
Sale of unused warehouse	11,400
	(30,600)
Net cash flow from investing activities		(30,600)
Cash flow from financing activities:
Long term loan from bank	37,000
Dividends paid	(4,400)
	32,600
Net cash flow from financing activities		32,600
Net increase or decrease in cash		20,800
Cash at the beginning of the year		3,400
Cash at the end of the year		$24,200