Question

5. (PSA11.4) These are the financial statements of Metro Meats Ltd: 2014 METRO MEATS LTD Statement of Financial Position as at 31 December 2015 2015 Assets Cash $29 000 Accounts receivable 28 000 Inventory 25 000 Property, plant and equipment 60 000 Accumulated depreciation (20 000) Total $122 000 Liabilities and equity Accounts payable 26 000 Dividends payable 3 000 Income tax payable 5 000 Debentures payable 27 000 Share capital 18 000 Retained earnings 43 000 Total $122 000 $15 000 14 000 35 000 78 000 (24 000) $118 000 $ 25 000 8 000 33 000 14 000 38 000 $118 000

Answer 1

Working-Direct Cash Flow Statement
Sales	$                                                        2,50,000.00
Less: Increase in Accounts receivable	$                                                          -14,000.00
Cash received from customers	$                                                        2,36,000.00
Cost of goods sold	$                                                        2,10,000.00
Add: Increase in Inventory	$                                                          -10,000.00
Purchases	$                                                        2,00,000.00
Less: Increase in Accounts Payable	$                                                            -1,000.00
Cash paid for inventory	$                                                        1,99,000.00
Selling Expenses	$                                                           18,000.00
Less: Depreciation	$                                                            -5,500.00
Cash paid for other operating expenses	$                                                           12,500.00
Income Tax expense	$                                                              4,000.00
Add: Decrease in income tax payable	$                                                              3,000.00
Cash paid for income taxes	$                                                              7,000.00
Metro Meats LTD
Statement of Cash Flow(Direct Method)
For the year ended December 31st,2015
Cash Flow from operating activities
Cash Received from customer		$                                     2,36,000.00
Cash paid to supplier		$                                   (1,99,000.00)
Cash paid for operating expenses		$                                       (12,500.00)
Cash Paid for Administrative Expense		$                                         (6,000.00)
Cash Paid for Interst Expense		$                                         (2,000.00)
Cash paid for Income Taxes		$                                         (7,000.00)
Net cash provided by operating activities=(A)		$                                           9,500.00
Cash Flow from Investing Activities
Sale of Equipment	$                                                              8,500.00
Cash Flow from Investing Activities=(B)		$                                           8,500.00
Cash Flow fom Financing Activities
Debentures were redeemed	$                                                            -6,000.00
Issuance of common Stock	$                                                              4,000.00
Payment of Interim Dividends	$                                                            -2,000.00
Net Cash used by Financing Activities=(C)		$                                          -4,000.00
Net Increase in cash=(D )=(A)+(B)+(C )		$                                         14,000.00
Cash at the beginning of the period=(E )		$                                         15,000.00
Cash at the end of the period=(D )+(E )		$                                         29,000.00
Accumulated Depreciation
Equipment	$                                                              9,500.00	Beginning balance	$                     24,000.00
Ending balance	$                                                           20,000.00	Depreciation Expense	$                       5,500.00
Total	$                                                           29,500.00	Total	$                     29,500.00
Equipment
Beginning Balance	$                                                           78,000.00	Accumulated depreciation	$                       9,500.00
		Bank(Sale of Equipment)	$                       8,500.00
		Balance C/d	$                     60,000.00
Total	$                                                           78,000.00	Total	$                     78,000.00
Debenture Payable
Cash	$                                                              6,000.00	Beginning balance	$                     33,000.00
Ending balance	$                                                           27,000.00
Total	$                                                           33,000.00	Total	$                     33,000.00
	Retained Earnings
Intrim Dividends	$                                                              2,000.00	Beginning balance	$                     38,000.00
Final Dividends Payable	$                                                              3,000.00
Ending balance	$                                                           43,000.00	Net Income	$                     10,000.00
Total	$                                                           48,000.00	Total	$                     48,000.00