Question
ZAMSEED is preparing its 2019 statement of cash flows, using the indirect method. The following is a list of items that may affect the statement.
ZAMSEED is preparing its 2019 statement of cash flows, using the indirect method. The following is a list of items that may affect the statement.
1) Purchase of land and building.
2) Decrease in accounts receivable.
3) Issuance of shares.
4) Depreciation expense.
5) Sale of land at book value.
6) Sale of land at a gain.
7) Payment of dividends.
8) Increase in accounts receivable.
9) Increase in accounts payable.
10) Decrease in accounts payable.
11) Purchase of equipment using a note.
12) Increase in inventory.
13) Issuance of bonds.
14) Sale of equipment at a loss.
15) Purchase of treasury shares.
Below is a list of the possible effect the above items will have when preparing the cash flow
code letters Effect
A Added to net income in the operating activities section
D Deducted from net income in the operating activities section
CII Cash inflow under investing activities
COI Cash outflow under investing activities
CIF Cash inflow under Financing activities
COF Cash outflow under Financing activities
Required Using the code letters provided, indicate how each of items 1 to 15 above will affect ZAMSEED 2019 statement of cash flows (15 marks)
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