Question

- / 20 Question 4 of 4 Donalty Corporation Statement of Cash Flows Year Ended December 31, 2022 Operating Activities 50200 Net Cash Used by Operating Activities Investing Activities 25000 Purchase of Equipment 25000 Net Cash Used by Investing Activities Financing Activities Issue of Common Shares 51000 Borrowing of Bank Loan 55000 Payment of Dividend 1000 Net Cash Used by Financing Activities 105000 130200 Net Increase in Cash 0 Cash, January 1, 2022 o BI 99

Answer 1

Computation of cash balance on 31/12/2022:

1)Operating Activities

Net cash used by operating activities. 50200

2)Investing Activities

a) purchase of equipment (25000)

Net cash used by investing activities. (25000)

3)Financing Activities

a) Issue of common shares 51000

b) Borrowing of Bank Loan 55000

c) Payment of Dividend. (1000)

Net cash used by financing activities. 105000

Net increase in cash. 130200

Cash on Jan 1,2022. 0

Cash on Dec 31, 2022. 130200

Notes:

1. Since nothing mentioned about the operating activities it is assumed to be inflow of cash

2. Purchase of equipment is outflow of cash

3. Issue of common shares is inflow of cash

4. Borrowing of bank loan is inflow of cash

5. Payment of dividend is outflow of cash

6. Cash From Operating Activities

The operating activities on the CFS include any sources and uses of cash from business activities. In other words, it reflects how much cash is generated from a company's products or services.

7. Cash From Investing Activities

Investing activities include any sources and uses of cash from a company's investments. A purchase or sale of an asset, loans made to vendors or received from customers, or any payments related to a merger or acquisition is included in this category. In short, changes in equipment, assets, or investments relate to cash from investing.

8. Cash From Financing Activities

Cash from financing activities includes the sources of cash from investors or banks, as well as the uses of cash paid to shareholders. Payment of dividends, payments for stock repurchases, and the repayment of debt principal (loans) are included in this category.