Question

QI. a) Mike Corporation. Accounts Department have compiled the following data for the year ended December 31st, 2019: 35,000 40,000 Payment of dividends Proceeds from issuance of common shares Sales revenue Increase in operating current asfets other than cash Repurchase of common shares. Cost of goods sold $ 6,000 Other operating expenses. Purchase of equipment... 20,000 Decrease in operating current 224.000 liabilities.... Payment of note payable. 30,000 Proceeds from sale of land. 5,000 Depreciation expense $100,000 5,000 30,000 60,000 8.000 Prepare the operating activities section of Mike's statement of cash flows for the year ended December 31st, 2019. Please uses the indirect method for operating cash flows. Answer: Mike Corporation. Statement of Cash flow For Year Ended December 31, 2019 b) State how the statement of cash flows helps investors and creditors perform each of the following functions: i. 11 Predict future cash flows. Evaluate management decisions.

Answer 1

224,000 LIOD ODO) $124600 $ 8000 4132000 C#300.00) ($ 5000) by Mike Corporation statement of cashflow for the year end od December, 31,2019 Particulars Amount(*) Amount (8) cash receipt from cutomer ( cash paid to suppliers (cost of goods sold) cash flows from operations #) Hi depreciation expense operating profit before working capital changes 1) Increase in operating current ancho () Decrease in operating current liabilities Net cash flowers from operating activities $91000 b) Os cashflow statements are ured creditors to asses the anicity to meet payment requirements, by chort dlm and long-term Lendere to determine ability to.continue to cut its current loan obligations, by stock holders to decide nehetties business is likely to prey or increase current dividends. canglowo state meent helps management in decision making through following ways. • teps management in deciding wehether to invent cash balance is positive in capital market in order to generate additional source of income. • telps management in mating Financial decision nehether to add on company's priventory or customers nehich needs cash • tlelps to anticipate future deficits in cash and help them to make financing decisions beforehand. the 1/1 C a =