Question
Question 1: List down the usefulness and format of the cash flow statement. (3 marks) Question 2: Supreme Corporation had the following transactions: Paid salaries
Question 1: List down the usefulness and format of the cash flow statement. (3 marks)
Question 2: Supreme Corporation had the following transactions:
- Paid salaries of $4,000.
- Issued 1,000 shares of $1 par value common stock for equipment worth $16,000.
- Sold equipment for $3,000.
- Sold land (cost $12,000) for $16,000.
- Borrowed $ 10,000 from creditors
- Cost of goods sold for the month is worth $780
- Use cash flow activity categories, determine which activity each of the above transactions belongs to. (2 marks each * 6 = 12 marks)
- Predict how each of the transactions would affect the statement of cash flow. (2 marks each * 6 = 12 marks)
- Prepare a statement of cash flow for the above transactions (10 marks)
Question 3: Explain why is it significant for a company to prepare a statement of cash flow in your own words. (5 marks)
Question 4: Hamid Software reported the following:
Beginning Inventory | July 1 | 250 units @ BD 12 | BD 3,000 |
Purchases: | July 3 | 125 units @ BD 11 | BD 1,375 |
| July 10 | 342 units @ BD 10 | BD 3,420 |
| July 25 | 400 units @ BD 12 | BD 4,800 |
| July 30 | 100 units @ BD 10 | BD 1,000 |
Sales | July 4 | 150 units |
|
| July 13 | 230 units |
|
| July 25 | 400 units |
|
Instructions:
Determine the COGS and ending inventory cost at July 31 using the assumtions (a) FIFO (4 marks) and (b) average-cost (4 marks)
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