Question 4. (20 marks) Chia Pet Cafe Statement of Cash Flows Statement of Cash Flows Chia Pet Cafe had the following balance sheet and income statement for the years Year 2 and Year 3. During Year 3. Chia Pet sold a piece of equipment that originally cost $15,000 and had accumulated depreciation of S4,000 for $8,000 Required Prepare a Statement of Cash Flows for Chia Pet Cafe for Year 3. Cha Pet Cafe Income Statement for the years ended December 31 Year 2 Year 3 Sales Food $546,000 5579,000 Beverage 178.000 187.000 Total Sales $724,000 $766,000 Cost of Sales Food $234.000 $245,000 Beverage 45.000 43.500 Total Cost of Sales S279.000 $288.500 Gross Profit S445,000 S477.500 Labour Expenses Payroll S214,000 $244.000 Benefits 27.820 24.400 Total Labour Costs S241,820 $268.400 Operating Expenses Credit card expenses $17,000 $19,000 Supplies 18,000 17.500 Property tax 5,000 6,000 Audit and legal 3,000 3,000 Advertising 4,500 5.000 Utilities and insurance 27,000 31,000 Repairs and maintenance 10,000 10,000 Interest 25.000 3.3.000 Total Expenses Before Depreciation $109,500 Depreciation building $20,000 $20.000 Depreciation: fixtures 23.000 24.000 Total Operating Expenses $152.500 Net Income Before Taxes $50,680 S40,600 Income tax (25%) 2.670 10.150 Net income $38,010 $30.450 S124,500 $168.500 Payroll $214,000 $244.000 Benefits 27.820 24.400 Total Labour Costs $241.820 $268.400 Operating Expenses Credit card expenses $17,000 $19,000 Supplies 18.000 17,500 Property tax 5.000 6,000 Audit and legal 3,000 3,000 Advertising 4,500 5.000 Utilities and insurance 27.000 31.000 Repairs and maintenance 10,000 10,000 Interest 25,000 33.000 Total Expenses Before Depreciation $109,500 S124,500 Depreciation building $20,000 $20,000 Depreciation: fixtures 23.000 24,000 Total Operating Expenses S152 500 $168.500 Net Income Before Taxes $50,680 $40,600 Income tax (25) 2.670 10.150 Net income $38,010 $30,450 Chin Pet Cafe Balance Sheet as at December 31 Year 2 Year 3 Assets Cash S25,000 $22.000 Accounts receivable 34,000 45.950 Inventory 4.500 4.000 Total Current Assets 563,500 $71,950 Fixed Assets Building, equipment $478,000 S481,000 Less accumulated depreciation 155.000 195.000 Net fixed assets $323.000 S286.000 Total Assets S386,500 S357.950 26.000 Liabilities and Owners' Equity Accounts Payable $13,000 $19,000 Current portion of long-term debt 23.000 Total Current Liabilities $36,000 $45,000 Long-term debt $214,000 $195.000 Total Liabilities S250,000 S240,000 Owners' Equity Common Stock $75,000 $40,000 Retained Earnings 61.500 77.950 Total Owner's Equity $136.500 $117.950 Total Liabilities and Owners' Equity $386,500 $357.950 Question 4.(20 marks) Chia Pet Cafe Statement of Cash Flows Statement of Cash Flows Chia Pet Cafe had the following balance sheet and income statement for the years Year 2 and Year 3. During Year 3. Chia Pet sold a piece of equipment that originally cost $15,000 and had accumulated depreciation of $4,000 for $8,000. Required Prepare a Statement of Cash Flows for Chia Pet Cafe for Year 3. Chia Pew Caf Income Statement for the years ended December 31 Year 2 Year 3 Sales Food $546,000 5579.000 Beverage 178.000 187.000 Total Sales $724,000 $766,000 Cost of Sales Food $234,000 S245.000 Beverage 45,000 43.500 Total Cost of Sales $279.000 $288 500 Gross Profit $445,000 $477,500 Labour Expenses Payroll $ 214.000 $244,000 Benefits 27.820 24400 Total Labour Costs S241.820 S268,400 Operating Expenses Credit card expenses $17,000 $19.000 Supplies 18,000 17.500 Property tax 5,000 6,000 Audit and legal 3.000 3.000 Advertising 4,500 5,000 Utilities and insurance 27,000 31,000 Repairs and maintenance 10,000 10,000 Interest 25.000 33.000 Total Expenses Before Depreciation S109,500 S124,500 Depreciation: building $20,000 $20.000 Depreciation: fixtures 23.000 24.000 Total Operating Expenses SI52 500 S168.50 Net Income Before Taxes $50,680 S40,600 Income tax (25%) 2.670 LOISO Net income $38. 010 $30.450 Cha Pet Cafe Balance Sheet as at December 31 Year 2 Year 3 Assets Cash $25,000 $22.000 Accounts receivable 34,000 45.950 Inventory 4.300 4.000 Total Current Assets $63.500 $71.950 Fixed Assets Building, equipment $478.000 $481.000 Less accumulated depreciation 155.000 195.000 Net fixed assets S323.000 $286.000 Total Assets S386,500 S357.950 26.000 Liabilities and Owners' Equity Accounts Payable S13,000 $19.000 Current portion of long-term debt 23.000 Total Current Liabilities S36,000 $45,000 Long-term debt $214.000 $195.000 Total Liabilities $250,000 S240,000 Owners' Equity Common Stock 575.000 $40,000 Retained Earnings 61.500 77.950 Total Owner's Equity $136.500 S117.950 Total Liabilities and Owners' Equity $386.500 $357.950
