Question

06. The comparative statements of financial position for Corpus Inc. as of March 31, 2019 and 2020, and the statement of earnings for the year ended March 31, 2000 e presented below Corpus Inc. Statement of Financial Position a at March 31 2020 Assets Cash $10,000 $14.000 Accounts receivable 68.000 Inventory 54.000 43.000 Prepaid expenses 4.000 6.000 Land 52.000 Property, plant and equipment, net 174,000 152.000 Intangible assets 16.000 20.000 $378.000 $347.000 Liabilities and Shareholders' Equity Accounts payable Income tax payable Accrued abilities Long term notes payable Contributed capital Retained earnings $14,000 $32,000 5.000 2.000 12.000 4.000 104.000 100.000 98.000 80,000 145.000 9.000 $378.000 $347.000 Corpus Inc. Statement of Earings for the year ended March 31, 2020 $77,000 SEX.000 4.000 Cost of goods sold Amortization expense intangible assets Depreciation expense property, plant and equipment Operating expenses Interest expense Earrings before tax Income tax expense Net earning 17.000 195,000 3,000 $61.000 110,000 52.000 566.000 Additional information: 1. Land was sold for its carrying value for cash 2 Cash dividends were declared and paid in 2020 New equipment was purchased for cash at a cost of S61,000 and old equipment was sold its carrying amount 4. No shares were repurchased during the year. Required: 1. Prepare a statement of cash flow for Corpus Inc. for the year ended March 31. 2000. Use the indirect method to report cash flows from operating activities 2. What additional information does a statement of cash flows provide to the user that is not available on any of the other statement?

Answer 1

Q1. Cash Flow Statement-

Statement of Cash Flows
For the Years Ending December 31, 2020
A) Cash Flows from Operating Activities -	Amount (In $)	Amount (In $)
Net Income after dividend tax and interest (66000-10000(Dividend))		$56000
Add/Less- Expenses Not Requiring Cash/non-operating transactions-
Add- Depreciation	$17,000
Add-Payment of interest	9,000
Add- Amortisation on intangible assets	4,000
Add-Cash dividend (financing activity) (66000-(145000-89000))	10,000
Add-Provision for taxation(52000+5000-2000) (Tax paid is to be reduced at last)	55,000	$95,000
Cash from operation before working capital adjustment		$1,51,000
Working Capital Adjustments-
Sub.- Addition in Accounts Receivable	-26000
Add-Prepaid exp.	2000
Subtract -Decrease in Accounts Payable	-18000
Subtract- Increase in Inventory	-11000
Add- Increase in liabilities	8000	-45000
Cash Flows from Operating Activities before Tax		106000
Less-Tax paid		-52000
Net Cash flow from Operating Activities (A)		54000
B) Cash Flows from Investing Activities
Purchase of eqipment *	-61000
Sale of equipment*	22000
Sale of land* ($70000-$52000)	18000
Net cash used in investing Activities (B)		-21000
C) Net Cash from Financing Activities
Issue of contributed capital	18000
payment of long term notes payable	-36000
Payment of cash dividend	-10000
Payment of interest	-9000
Net cash used in Financing Activities (C)		-37000
Total Cash flow from all activities (A+B+C)		-4000
CASH, BEGINNING OF YEAR		$14000
CASH, END OF YEAR		$10,000

* working note-1

Property plant & Equipment Account
Opening balance	$1,52,000	Depreciation	$17,000
Cash(Eq. Purchase)	$61,000	cash (sale of Eq.)Balance	$22,000
		Closing balance	$1,74,000
	$2,13,000		$2,13,000

Q2. Information about movement of cash & cash equivalents through different activities (operating, investing and financing) between a particular period, is additional information which can not be disclosed by any other fiinancial statement.

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