Question

The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows: Dec. 31, 20Y3 Dec. 31, 20Y2 Assets Cash $625,650.00 $586,340.00 Accounts receivable (net) 228,170.00 208,030.00 Inventories 641,480.00 617,130.00 Investments 0.00 240,290.00 7 Land 328,170.00 0.00

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.

Answer 1

A Cash flow statement provides the following information:
1) Information about company's cash receipt and cash payment during an accounting period.
2) Information about company's operating, investing and financing activities.
3) Information access the company's liquidity, solvency and financing flexibility.
> Cash flow from operating activities (CFO), consists of the inflows and outflows of cash resulting from revenue and expense transactions that affect a firm's net income.
> Cash flow from investing activities (CFI) consists of the inflow and outflows of cash resulting from the acquisition of long term assets and investment.
> Cash Flow from financing activities (CFF) consists of the inflow and outflows of cash resulting from transactions affecting a firm's capital structure.

Amount Amount WN $53,57,989 ($33,11,420) ($17,66,909) ($1,33,650) $1,46,010 $2,80,680 ($3,28,170) ($1,53,770) Livers Inc Statement of Cash Flows For the year ended December 31, 20Y3 Particulars Working Cash Flow from Operating Activities Cash Received From Customers Cash payment for merchandise Cash payment for Operating Expense Cash Payemnt for income taxes Net Cash flow from operating activities Cash Flow from Investing Activities Cash received from sale of investments Cash paid for Purchase of Land Cash paid for Purchase of Equipment Net Cash used in investing activities Cash Flow from Financing Activities Cash received from sale of Common Stock Cash paid for dividends Net Cash flow from financing activities Change in cash Add: Cash Balance at the beginning of the year Cash at the end of the year Working: 1 Cash Received From Customers Beginning Accounts Receivable $2,08,030 Add: Sales $53,78,129 Less: Ending Accounts Receivable ($2,28,170) Cash Received From Customers $53,57,989 ($2,01,260) $1,87,500 ($92,940) $94,560 $39,310 $5,86,340 $6,25,650

2 Cash payment for Merchandise Ending inventory = Beginning inventory + Purchases - Cost of Good Sold Purchases = Ending inventory + Cost of Good sold - Beginning inventory Ending inventory $6,41,480 Add: Cost of Good Sold $33,06,510 Less: Beginning inventory ($6,17,130) Purchases $33,30,860 Beginning Accounts Payable Add: Purchases Less: Ending Accounts Payable Cash Paid for Merchandise $4,04,860 $33,30,860 ($4,24,300) $33,11,420 3 Cash Payment for Operating Expense Beginning Accrued Expense Payable Add: Other Operating Expense Less: Ending Accrued Expense Payable Cash Paid for Other Expense $52,880 $17,55,879 ($41,850) $17,66,909 4 Cash from sale of Common Stock Ending Common Stock Balance Add: Ending Paid in capital in excess over par-Common Stock Less: Beginning Common Stock Balance Less: Beginning Paid in capital in excess over par-Common Stock Cash from sale of Common Stock $1,50,000 $4,17,500 ($1,00,000) ($2,80,000) $1,87,500 5 Cash used for Dividend Beginning Dividend Payable Add: Dividend Declared Less: Ending Dividend Payable Cash used for Dividend $19,880 $96,260 ($23,200) $92,940