1.Cash Flow Statement-Operating Activities

The Garfield Ltd company uses the indirect method for preparing its statement of cash

flows. It reported a net income of $100,000 for the year 2016.

During the year 2016, the working capital accounts were changed as follows:

Increase in accounts receivable: $22,000

Increase in accounts payable: $18,600

Increase in inventory: $14,800

Decrease in non-trade notes payable: $30,000

Increase in available for sale securities: $32,000

The depreciation expense was $34,000 for the year 2016.

Required:

Compute net cash provided (used) by operating activities using the indirect method.

2.Partnerships

Anastasia and Georgina are in partnership sharing profits and losses in the ratio 3:2.

Georgina is entitled to a salary of $9,000 and interest on capital is paid at a rate of 8% per

annum. The partners' capital balances are:

Anastasia $75,000

Georgina $60,000

The partnership statement of profit or loss for the year shows a profit of $58,500.

Required:

Calculate how much of the total profit is Anastasia is entitled to.

3.Plant Assets and Depreciation

Angela purchased a machine for her business on 1 March 20X1 for $12,000. She incurred

additional costs for transportation of $1,300 and installation of $2,000. Shortly after she

started to use the machine, it broke down and the repairs of the machine cost $600. Angela

charges depreciation at 10% per annum on straight line basis with a full year's charge in the

year of acquisition.

Required:

Calculate the correct net book value of the machine at the year-end date of 31 December

20X1

4.Uncollectible Receivables

James Din has been advised that one of his customers has ceased trading and that he will

not recover the balance of $720 owed by his customer.

Required:

Record the journal entry that should be made in the general ledger.

5.Allowance for Doubtful Debts

Jones Ltd Trial Balance at 30 September 20X0 included:

Debit $ Credit $

Receivables ledger control account 90,350

Allowance for doubtful debts brought forward 2,490

The following information is also available:

(1) No entries have been made in respect of cash of $1,320 received from Marylyn Ltd

whose balance had been written off last year, and

2) At 30 September 20X0 an irrecoverable balance of $1,950 is to be written off and the

receivable allowance is to be adjusted to 15% of the remaining balance

Required:

Calculate the figure that will be reported in the statement of financial position at 30

September for receivables.