CASH FLOW OUTLINE

Question 1 The following information was extracted from the books of Sweet River Ltd as at September 30, 2013 2013 2012 $ $ ASSETS Cash 318,000 30,000 320,000 16,000 280,000 382,000 24,000 340,000 12,000 280,000 320,000 (32.000 964,000 Accounts Receivable Inventory Prepaid Expenses Land Equipment Accumulated Depreciation 0 1326,000 LIABILITIES AND EQUITY Accounts Payable Accrued Expenses Income Tax Payable Long Term Loan Ordinary Share Capital Retained Earnings 120,000 40,000 104,000 30,000 24,000 260,000 720,000 188,000 964,000 0 0 720,000 84,000 1,326,000 Sweet River Ltd Income Statement for the year Ended September 30, 2013 $ 1,950,000 (1,320,000 630,000 Revenue Cost of sales Gross Profit 352,000 36,000 2,000 Operating Expenses Depreciation Loss on Sale of Equipment (390,000) 240,000 (72.000) 168,000 Income Before Taxation Income Tax Net Income Addition Information: i. In 2013 the company declared and paid a dividend of $64,000 in cash ii. Long Term loan was issued at face value for $260,000 in cash iii. Equipment costing $40,000 was sold for $34,000 cash when the book value of the equipment was $36,000 Required: Prepare a Statement of Cash flow for the year ended September 30, 2013 (Total 25 marks) Cash flow outline Cash Flow Statement as at December 31, 2011 Operating Activities: Net Profit 000000 Adjustment for Depreciation 00000 Loss /gain on the sale of fixed asset Increase/decrease in provision 00000 000000 Operating CF before changes in working capital 000000 Changes in Working Capital: increase/decrease in debtors 00000 Increase/decrease in inventories 00000 Increase/decrease in prepaid exp 00000 Increase/ decrease in trade creditors 00000 Increase/decrease income tax payable 00000 00000 Cash flow from Operating Activities 00000 Investing Activities Purchase of premises 00000 Purchase of machinery 00000 Sale of Equipment 00000 Cash flow from investing Activities 00000 Financing Activities: Dividend paid 00000 ordinary Share Capital issue 00000 Cash flow from Financing Activities 00000 *Net increase in cash flow 00000 Cash at the beginning of the period 00000 Cash at the end of the period 000000 This should equate to the change in cash equivalent