Question

i have the answer for this question, however i dont understand how to get "24000" on the cash paid for expense". Thanks!

Question 4 (18 marks) The financial statements of Lewis Limited appear below: LEWIS LIMITED Comparative Statement of financial positions 31 December 2017 2016 Assets $ 23,000 44,000 Cash Accounts receivable 26,000 34,000 Merchandise inventory 15,000 20,000 Property, plant, and equipment 50,000 78,000 Accumulated depreciation (20,000) (24,000) Total $120,000 $126.000 Liabilities and Equity $ 15,000 $ 23,000 Accounts payable Income taxes payable 13,000 8,000 Notes payable 7,000 33,000 Ordinary shares 41,000 24,000 Retained earnings 44,000 38,000 Total $120,000 $126,000

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 $3,58,000 ($2,93,000) ($24,000) ($4,000) ($5,000) $32,000 $12,000 Lewis Limited Statement of Cash Flows (Direct Method) For the year ended December 31, 2017 Particulars Working Cash Flow from Operating Activities Cash Received From Customers Cash Paid for merchandise Cash Paid for Expenses Cash Paid for Interest Cash paid for Income Tax Cash from operating activities Cash Flow from Investing Activities Cash From sale of Equipment Cash used for purchase of Equipment Cash from Investing Activities Cash Flow from Financing Activities Repayment of Notes Payable Cash from sale of Common Stock Dividend Paid Cash used in Financing Activities Net Increase/Decrease) in Cash Add: Cash Balance at prior year end Cash Balance at the end of the year Working: 1 Cash Received From Customers Beginning Accounts Receivable $34,000 Add: Sales $3,50,000 Less: Ending Accounts Receivable ($26,000) Cash Received From Customers $3,58,000 $12,000 ($26,000) $17,000 ($14,000) ($23,000) $21,000 $23,000 $44,000

2 Cash Paid for Merchandise Ending inventory = Beginning inventory + Purchases - Cost of Good Sold Purchases = Ending inventory + Cost of Good sold - Beginning inventory Ending inventory $20,000 Add: Cost of Good Sold $2,80,000 Less: Beginning inventory ($15,000) Purchases $2,85,000 Beginning Accounts Payable $23,000 Add: Purchases $2,85,000 Less: Ending Accounts Payable ($15,000) Cash Paid for Merchandise $2,93,000 3 Cash Paid for Expense Deprecition for the year Beginning Accumulated Depreciation Less: Accumulated Depreciation of Equipment sold Less: Ending Accumulated Depreciation Depreciation for the year $24,000 ($16,000) ($20,000) ($12,000) Selling Expense Administrative Expense Less: Depreciation Exp Cash Paid for Other Expense $20,000 $16,000 ($12,000) $24,000 4 Income Tax Paid Beginning Income Tax Payable Add: Income Tax Expense Less: Ending Income Tax Payable Income Tax Paid $8,000 $10,000 ($13,000) $5,000