Arun Music Company

Chapter 13 Statement of Cash Flows 490 ASS 3. Redeemed debentures, 32,400. 4. Repaid long-term loans, 1,400. 5. Sold patents for cash, 300. 6. Sold investments, 36,800 (cost, 24,900). 7. Issued debentures, 526,000. 8. Purchased investments, 1,300. 9. Issued at par equity shares, 32,000. 10. Wrote off 1,600 of trade receivables and recognized bad debt expense of 2,200, included in selling and administrative expenses. 11. Cost of goods sold includes depreciation of 2,100. Required 1. Prepare the statement of cash flows using the direct method. 2. Present the statement of cash flows using the indirect method. 3. Explain why there was an increase in cash in spite of Vinay Electronics Company incurring a net loss of 6,500. Problem 13.14 Arun Music Company's its balance sheet as at October 31, 20x5 and 20X4 statement of profit and Preparing and Interpreting loss for the year ended October 31, 20X5 are as follows: the Statement of Cash Flows ***** ARUN MUSIC COMPANY Balance Sheet, October 31 LE 20X5 20X4 89,500 41,900 47,600 5,500 268,600 37,600 31,000 14,600 21,300 16,400 9,800 1,200 2,400 4,300 3,800 1,500 71,600 87,800 Assets Non-current assets Property, plant and equipment, at cost Deduct Accumulated depreciation... Property, plant and equipment, net..... Non-current investments... Current assets Inventories. Financial assets.. Trade receivables (net of allowance for credit losses 2,900; 31,800). Cash and cash equivalents Other current assets: Prepaid expenses...... Total assets Equity and Liabilities Equity Equity share capital Other equity. Liabilities Non-current liabilities Financial liabilities Borrowings. Bills payable. Current liabilities Financial liabilities Trade payables Current tax liabilities. Total equity and liabilities 49,000 12,600 41,000 9,700 14,200 9,500 5,500 0 10,300 900 87,800 4,800 1,900 71,600 ARUN MUSIC COMPANY Statement of Profit and Loss For the year ended October 31, 20X5 Sales.... Interest income. 392,700 98,000 Expenses Cost of goods sold Finance costs. 75,100 Assignment Material Dividend income ....... Gain on sale of plant.. Property, plant and equipment, at cost .. 1,800 Total income 1,200 2,300 Selling and administrative expenses Loss on sale of investments 2,200 14,500 Total expenses 1,400 Profit before tax. 93,200 Tax expense... 4,800 Profit for the period 1,900 2,900 Additional information: 1. Property, plant and equipment include land, 37,500 in 20x5 and 20X4. Land is not depreciated. 2. Purchased machinery for cash, 19,900. 3. Sold a plant, *5,000 (cost, 24,500; accumulated depreciation, 1,800). N 14. Purchased machinery on long-term credit, 25,500. 5. Purchased investments, 1,900. 6. Sold investments, 9,600 (cost, 211,000). 7. Redeemed debentures, 34,700. 8. Issued at par equity shares, 8,000. 9. Wrote off $2,100 of trade receivables and recognized bad debt expense of $3,200, included in selling and administrative expenses. 10. Cost of goods sold includes depreciation of 26,100. Required 1. Prepare the statement of cash flows using the direct method. 2. Present the statement of cash flows using the indirect method. 3. Explain why there was a decrease in cash in spite of Arun Music Company earning a net profit of $2,900. 20X7 20X6 Non-current assets Cochin Marine Foods Company's balance sheet as at November 30, 20X7 and 20x6 and statement of Problem profit and loss for the year ended November 30, 20X7 are as follows: Preparing the Stater Cash Flow Alternative Problem 1 COCHIN MARINE FOODS COMPANY Balance Sheet, November 30 Assets 360,700 20,300 40,400 1,800 360,900 17,900 43,000 6,900 tion