Question

Prepare the statement of cash flows for Emporium Ltd for the year ended 30 June 2020, using the direct method. (Show amounts that decrease cash flow using either a negative sign, e.g. -15,000 or parentheses, e.g. (15,000).)

If it's convenient, can you leave the problem-solving process? I'm not very familiar with how to calculate this problem. Thank you.

The following data relate to Emporium Ltd: Emporium Ltd Income statement for year ended 30 June 2020 Income Sales revenue $1,250,000 Expenses Cost of sales Depreciation -machinery Depreciation - buildings Other expenses $730,000 30,000 19,000 305,000 1,084,000 $166,000 Profit Emporium Ltd Comparative statements of financial position as at 30 June 2019 2020 Assets Cash at bank Accounts receivable Inventory Investments Machinery (net) Buildings (net) Land $56,000 $12,000 96,000 161,000 18,000 320,000 266,000 147,500 $716,500 $1,020,500 106,000 111,000 15,000 215,000 150,000 63,500 Liabilities and equity Accounts payable Expenses payable Mortgage payable Share capital Retained earnings $34,700 $49,700 4,800 216,000 451,000 299,000 $716,500 $1,020,500 6,800 125,000 375,000 175,000 Additional information a) Dividends were paid during the year. b) The increases in investments and machinery were from cash purchases. c) The increases in land and buildings were from purchases but were partly funded by an increase in the mortgage with the bank. d) Share capital was issued during the year for cash.

Answer 1

Emporium Ltd Statement of Cash flows For the Year Ended 30 June 2020 Cash flows from Operating Activities: Collections from accounts receivables Pavments Cah paid to suppliers Cash paid for Expenses S 1.260,000 S (765,000) S (307000) S (1,072,000) S 188,000 Net Cash provided by Operating Activities Cash Flows from Investing Activities Purchase of Investment Purchase of Machinery Purchase of Land and buildings Net Cash used by investing activities S (3,000) S (135,000) S (128,000) S (266,000) Cash Flows from Financing Activities Issuance of Share capital Payment of cash Dividends Net Cash used by financing activities Net Increase in Cash Cash balance at beginning of year cash balance at end of year S 76,000 S (42.000) S 34,000 S (44,000) S 56,000 S 12,000

Working Notes Collections from accounts receivables Opening balance of accounts receivables Add: Sales Revenue $ 106,000 $ 1,250,000 $ 1,356,000 $96,000 $ 1,260,000 Less: Closing balance of accounts receivables Cah paid to suppliers Cost of sales Add: Closing balance of Inventory Opening balance of accounts payables 730,000 $ 161,000 $34,700 $925,700 111,000 $49,700 $ 765,000 Less: Opening balance of Inventory Closing balance of accounts payables Cash paid for Expenses Other Expenses Add: Opening balance of Expenses Payable $ 305,000 6,800 $ 311,800 4,800 $307,000 Less: Cloing balance of Expens es payable Purchase of Land and Buildin Closing balance of Land Closing balance of Buildings Depreciation Expenses- Buildings $ 266,000 $147,500 $19,000 $ 432,500

Less Opening balance of $63,500 $150,000 $ 219,000 $91,000 $128,000 Less: Issuance of Mortagage Loan (216000-125000) Dividends paid Opening balance of Retained Earnings Add: Net Income $175,000 $166,000 $341,000 $299,000 42,000 Less: closing blandce of retained Ea