On the 1st July 2019 Jerome Ltd recorded at Cash Balance of $500 000 overdraft. The following transactions were undertaken by Jerome Ltd during the financial year ended 30 June 2020. Ignore GST. 1. Paid cash dividends of $240 000. 2. Sold for $475 000 used machinery with a carrying amount of $355 000. 3. Sold a long-term government bond, with a carrying amount of $160 000, for $184 000, including $15 000 accrued interest. 4. Purchased shares in MBW Ltd to be held as an investment for $400 000 cash. 5. Paid off a long-term $320 000 loan. Interest paid on this loan $18 000. 6. Received sponsorship funding $220 000. 7. Received from customers $1 172 000. 8. Issued ordinary shares for cash, $800 000. 9. Paid Wages to Employees $312 000. 10. Purchased factory machinery, giving $110 000 cash and signing a mortgage loan for $400 000. 11. Issued 5% debentures to secure funding of $710 000. 12. Purchased land to be held for future expansion for $850 000 cash. 13. Income Tax paid $92000. 14. Paid to Suppliers $679 000. Required A. Prepare the Cash Flow Statement for Jerome Ltd if the Cash Balance at the beginning was an overdraft of ($500 000). Show each of the following sections: (1) cash flow from Operating Activities (iii) Cash flows from Financing Activities Cash flow from Investing activities (iv) Cash balance at end of period B. You are given the information below from the Income Statement and Balance Sheet. Use the information to prepare the reconciliation of the net profit with cash flows from operating activities. Net Profit Depreciation Gain on sale of assets Decrease in Wages and Taxes payable Increase in Accounts Receivable Decrease in Supplies Increase in Interest Payable Decrease in Inventories Decrease in Accounts Payable $419,000 52,000 144,000 56,000 28,000 14,000 22,000 31,000 19,000 C. Write a brief report evaluating and the cash flows from each of the business's activities and comment on the overall cash position of the business. On the 1st July 2019 Jerome Ltd recorded at Cash Balance of $500 000 overdraft. The following transactions were undertaken by Jerome Ltd during the financial year ended 30 June 2020. Ignore GST. 1. Paid cash dividends of $240 000. 2. Sold for $475 000 used machinery with a carrying amount of $355 000. 3. Sold a long-term government bond, with a carrying amount of $160 000, for $184 000, including $15 000 accrued interest. 4. Purchased shares in MBW Ltd to be held as an investment for $400 000 cash. 5. Paid off a long-term $320 000 loan. Interest paid on this loan $18 000. 6. Received sponsorship funding $220 000. 7. Received from customers $1 172 000. 8. Issued ordinary shares for cash, $800 000. 9. Paid Wages to Employees $312 000. 10. Purchased factory machinery, giving $110 000 cash and signing a mortgage loan for $400 000. 11. Issued 5% debentures to secure funding of $710 000. 12. Purchased land to be held for future expansion for $850 000 cash. 13. Income Tax paid $92000. 14. Paid to Suppliers $679 000. Required A. Prepare the Cash Flow Statement for Jerome Ltd if the Cash Balance at the beginning was an overdraft of ($500 000). Show each of the following sections: (1) cash flow from Operating Activities (iii) Cash flows from Financing Activities Cash flow from Investing activities (iv) Cash balance at end of period B. You are given the information below from the Income Statement and Balance Sheet. Use the information to prepare the reconciliation of the net profit with cash flows from operating activities. Net Profit Depreciation Gain on sale of assets Decrease in Wages and Taxes payable Increase in Accounts Receivable Decrease in Supplies Increase in Interest Payable Decrease in Inventories Decrease in Accounts Payable $419,000 52,000 144,000 56,000 28,000 14,000 22,000 31,000 19,000 C. Write a brief report evaluating and the cash flows from each of the business's activities and comment on the overall cash position of the business
