Luo Ltd. had the following statement of financial position at December 31, 2018 (amounts in thousands). During
Question:
Luo Ltd. had the following statement of financial position at December 31, 2018 (amounts in thousands).
1. Luo liquidated its non-trading equity investment portfolio at a loss of ¥5,000.
2. A tract of land was purchased for ¥38,000.
3. An additional ¥30,000 in ordinary shares were issued at par.
4. Dividends totaling ¥10,000 were declared and paid to shareholders.
5. Net income for 2019 was ¥35,000, including ¥12,000 in depreciation expense.
6. Land was purchased through the issuance of ¥30,000 in additional bonds.
7. At December 31, 2019, Cash was ¥70,200, Accounts Receivable was ¥42,000, and Accounts Payable was ¥40,000.
Instructions
a. Prepare a statement of cash flows for the year 2019 for Luo.
b. Prepare the statement of financial position as it would appear at December 31, 2019.
c. Compute Luo's free cash flow and the current cash debt coverage for 2019.
d. Use the analysis of Luo to illustrate how information in the statement of financial position and statement of cash flows helps the user of the financial statements.
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Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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