Question
Question 2 (10 marks) The accounting records of JasonJohnson Company provided the data below for years ending 30 June 2022 and 30 June 2021: 2022
Question 2(10 marks)
The accounting records of JasonJohnson Company provided the data below for years ending 30 June 2022 and 30 June 2021:
2022 | 2021 | |
$ | $ | |
Sales (all on credit) for the year | 950,000 | |
Cost of goods sold for the year | 380,000 | |
Discount provided to customers for early payment | 3,500 | |
Bad debts expense for the year | 2,500 | |
Depreciation expense | 55,000 | |
Net profit | 509,000 | |
30 June 2022 | 30 June 2021 | |
$ | $ | |
Accounts receivable | 160,000 | 140,000 |
Less: Allowance for doubtful debts | 4,500 | 4,200 |
155,500 | 135,800 | |
Inventory | 88,360 | 62,200 |
Accounts payable | 55,500 | 47,700 |
Required:
a) Based on the information given, prepare the section of cash flows statement for "net cash flows from operating activities" for the year ended 30 June 2022for JasonJohnson company. Show your calculations for each item included in the section of the statement. (5 marks)
ANSWER a):
b)Prepare a reconciliation of net profit to net cash flows from operating activities. (5 marks)
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