Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 1 (Total 20 marks) ledon31 Additional information: 1. Land purchase is for cash. 2. A building costing $89,000 with accumulated depreciation of $75,000 is

image text in transcribed
image text in transcribed
Question 1 (Total 20 marks) ledon31 Additional information: 1. Land purchase is for cash. 2. A building costing $89,000 with accumulated depreciation of $75,000 is sold for cash. 3. Accumulated depreciation is affected by depreciation expense and the sale of building. 4. Cash is received for issuing bonds and shares. 5. The balance of Retained earnings is affected by dividend payment and net profit. Required: a. Prepare a statement of cash flows using the indirect method for 2021 . The company classifies interest paid and dividends paid as operating cash flows. Necessary computation steps of cash paid for dividends, interest, and tax are required. (12 marks) b. Provide 4 reasons why Nomad's net income is different from its net operating cash flows. (2 marks) c. Analyze the statement of cash flows prepared in part a. and comment on: i. the main reason(s) for the net cash flows from operating activities' positive (or negative) result and what Nomad Company should pay attention to or review. (3 marks) ii. the main reason(s) for the net cash flows from investing activities' positive (or negative) result and what Nomad Company should pay attention to or review. (3 marks). Question 1 (Total 20 marks) ledon31 Additional information: 1. Land purchase is for cash. 2. A building costing $89,000 with accumulated depreciation of $75,000 is sold for cash. 3. Accumulated depreciation is affected by depreciation expense and the sale of building. 4. Cash is received for issuing bonds and shares. 5. The balance of Retained earnings is affected by dividend payment and net profit. Required: a. Prepare a statement of cash flows using the indirect method for 2021 . The company classifies interest paid and dividends paid as operating cash flows. Necessary computation steps of cash paid for dividends, interest, and tax are required. (12 marks) b. Provide 4 reasons why Nomad's net income is different from its net operating cash flows. (2 marks) c. Analyze the statement of cash flows prepared in part a. and comment on: i. the main reason(s) for the net cash flows from operating activities' positive (or negative) result and what Nomad Company should pay attention to or review. (3 marks) ii. the main reason(s) for the net cash flows from investing activities' positive (or negative) result and what Nomad Company should pay attention to or review

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Managers And Entrepreneurs

Authors: Charles T. Horngren

8th Edition

1269778684, 9781269778688

More Books

Students also viewed these Accounting questions

Question

Why do some people resist change?

Answered: 1 week ago

Question

Draw a schematic diagram of I.C. engines and name the parts.

Answered: 1 week ago

Question

Summarise the scope of HRM and the key HRM functions

Answered: 1 week ago