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The financial statements of Customers First Ltd are presented as follows: $ 2018 Customers First Ltd Statement of Financial Position as of 30 June 2019
The financial statements of Customers First Ltd are presented as follows: $ 2018 Customers First Ltd Statement of Financial Position as of 30 June 2019 $ 2019 Assets Cash 26 000 Accounts receivables 28 000 Inventory 38 000 Property, plant and equipment 70 000 Accumulated depreciation (27 000) 135 000 33 000 14 000 25 000 78 000 (24 000) 126 000 Liabilities and equity Accounts payable Income tax payable Notes payable Share capital Retained earnings 31 000 26 000 20 000 25 000 33 000 135 000 43 000 20 000 10 000 25 000 28 000 126 000 Customers First Ltd Income statement for year ended 30 June 2019 Sales Cost of sales Gross profit Selling expenses Administrative expenses Interest expense Profit before income tax Income tax expense Profit $ 2019 286 000 194 000 92 000 28 000 9 000 7 000 48 000 7 000 41 000 Additional information: Dividends were declared and paid. During the current year equipment was sold for $10 000 cash. This equipment cost $15 000 originally and had a carrying amount of $10 000 at the time of sale. All depreciation expense, $8000, is in the selling expense category. Additional equipment was purchased for cash. All operating expenses except for depreciation are paid in cash. . Required: a) Prepare a statement of cash flows using the direct method. Show workings. (20 marks) Please type your answers in the table below. b) Reconcile profit to cash provided by operating activities (This is also the indirect method of calculating operating activity cash flows). (5 marks) [Answer here] a) Cash flow statement using the direct method: Customers First Ltd Statement of Cash Flows for the year ended 30 June 2019 Cash flows from operating activities: [] [] [] [] [] [] [] [] Net cash [] [] [] ]] by operating activities Cash flows from investing activities: [] [] [] [] [] [] [] [] Net cash [ ]] by investing activities [] [] Cash flows from financing activities: [] [] [] [] [] [] [] Net cash ]] by financing activities Net ) in cash Cash at beginning of period Cash at end of period LLL [] [] [Show workings here] ] b) Reconciliation of profit to cash provided by operating activities (indirect method): Customers First Ltd Note to Statement of Cash Flows for the year ended 30 June 2019 Reconciliation of profit to cash provided by operating activities. Cash flows from operating activities: [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [] [Show workings here] ]
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