The condensed financial data of Freshest Farmers Ltd follow. 

Additional information:

1. New machinery costing $127 500 was purchased for cash during the year.

2. Old machinery having an original cost of $86 250 was sold for $2250 cash.

3. Debentures matured and were paid off at face value for cash.

4. A cash dividend of $33 525 was declared and paid during the year. 5. Accounts payable pertain to inventory creditors.  

Required

(a) Prepare a statement of cash flows for Freshest Farmers Ltd, using the direct method for operating cash flows.

(b) Prepare a reconciliation of profit and cash from operations.

Transcribed Image Text:

Assets Cash FRESHEST FARMERS LTD Statement of financial position as at 31 March 2016 Accounts receivable Inventories Prepaid expenses Investments Plant and machinery Accumulated depreciation Total Liabilities and equity Accounts payable Accrued expenses payable Debentures payable Share capital Retained earnings Total 2016 $147 000 136 200 168750 27600 162 000 405 000 (75000) $971550 $138 000 25050 127 500 330 000 351000 $971550 2015 $ 57600 49 500 154 275 24 000 141000 363750 (78000) $712 125 $100 950 25 500 150 000 277500 158 175 $712125