Question

Thelma Blinkley is the sole proprietor of the Retro Lounge a business that sells retro banana lounges. Thelma is a good fri

RETRO LOUNGE INCOME STATEMENT FOR THE YEAR ENDED 30th JUNE 2020 Net Sales Cost of Sales Discount Received Gross Profit Other

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Answer #1

Cash Flow Statement

Cash flow from Operating Activities

Net Income from operating activities 58,984

Adjustments

Depreciation on fixed Assets 5,400

(Increase) Decrease in Current Assets

(Increase) in Accounts Receivables (26,700)

(Increase) in inventory (12,000)

(Increase) in prepaid expenses ( 950)

Increase (Decrease) in Current Liabilities

Increase in bank overdraft 6,402

Increase in Accounts payable 698

(Decrease) in expenses payable (10)

Increase in Tax Payable 12,590

Net Cash provided by Operating Activities 44,414

Cash flow from Investing Activities

Purchase of Plant and Equipment (19,500)

Sale of land 100,000

Net Cash provided (Used) by Investing Activities 81,500

Cash flow from Capital Account

Capital at the beginning 229,769

Add Net Income 58,984

Total 288,753

Less Capital at the close of the year 167,778

Net cash provided(withdrawan) ( 120,975)

Net increase (Decrease) in Cash 4,939

Opening balance of Cash (Cash in hand and bank balance)   4,959

Closing Cash Balance 9,898

As per Question Cash at Bank is only "0", this needs to be reconciled.

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