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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:

  1. Paid salaries of $4,000.
  2. Issued 1,000 shares of $1 par value common stock for equipment worth $16,000.
  3. Sold equipment for $3,000.
  4. Sold land (cost $12,000) for $16,000.
  5. Borrowed $ 10,000 from creditors
  6. Cost of goods sold for the month is worth $780

  1. Use cash flow activity categories, determine which activity each of the above transactions belongs to. (2 marks each * 6 = 12 marks)
  2. Predict how each of the transactions would affect the statement of cash flow. (2 marks each * 6 = 12 marks)
  3. 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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