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Here is the question paper After graduating near the top of a class, Croatia la amplayed by a liated company as financial officer. Both the
Here is the question paper
After graduating near the top of a class, Croatia la amplayed by a liated company as financial officer. Both the statement of financial position and the statement of profiter loss of the company are available. His first task is to prepare the statement of cash flows. $1,350,000 2011.000 303,000 2019 $ 45,000 80,000 145,000 8.000 80,000 100,000 411,000 2018 $ 40,000 92,000 130,000 5,000 40,000 100,000 300,000 Statement of Profit or Lose For the year anded December 31, 2019 Sales Cost of goods sold Gross profit Operating incomalexpense) Depreciation expense (22,000) Patent amortization (1,000) Other expenses (278,000) Interest expense 0.000 Income before taxes Income tax expense Net Profit (205,000 58,000 1.000 Statement of Financial Position December 31, 2019 and 2018 Assets Cash Accounts recevable Inventory Prepaid expenses Investment Land Equipment Less Accumulated depreciation Patent Total assets Liabilities and Equity Accounts payable Wages payable Interest payable Notes payable Bonds payable Ordinary share capital Retained earnings Total liabilities and equity (142,000) 18.000 SZ109 (120,000) 17.000 $ 62,000 2.000 1.000 35,000 176,000 255,000 212.000 3742.000 $ 33,000 6,000 3,000 D 125.000 255,000 182.000 1804.000 Additional information is also gathered as following Note payable was issued to borrow cash. b. Equipment costing 5111,000 was bought by issuing bonds payable During the year 160,000 cash paid to retire the bonds payable. d. Declared and paid cash dividends of $20,000. The company's management wanted to classily payments for dividends paldas financing activities Required Part A Prepare a complete statement of cash flows; report its operating activities using the indirect method, assuming the company classifies interest paid as operating activities and dividend paid as a financing activity. (You will need to make reasonable assumptions concerning the reasons for changes in some account balances) (16 marks) Part. B Based on the financial and additional information given, assuming the management decided to classify the interest paid and dividend paid as financing activities. Prepare the appropriate section of "cash flows from financing activities only. (4 marks) Part Describe briefly how the acquisition of equipment would be reported on a statement of cash flows if it is purchased by partly paying cash and partly Issuing of bonds payable. it's not necessary to prepare the cash flows statement.) 5 marks) Step by Step Solution
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