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Date Submitted: 10/14/2012 03:45 AM
GSB 9004 Semester 2, 2012
Chapter 7
7.16 Three sisters formed a partnership to sell skin care products made from organic ingredients. They have been operating for one year. The bank balance at the end of the year is $41 000. A summary of business transactions is as follows:
Sales to customers 256 000
Receipts from customers 199 000
Payments for inventory 103 000
Payments for electricity, telephone, rent and insurance 5 000
Purchase of a motor vehicle 30 000
Drawings 50 000
Payment of interest 8 000
Loan proceeds 20 000
Interest received 1 000
Income taxes paid 3 000
Equity Injection 20 000
Required
Prepare a statement of cash flows.
Statement of Cash Flows
Cash flows from operating activities
Receipts from customers 199 000
Payments to suppliers and employees (108 000)
Interest received 1 000
Interest paid (8 000)
Income taxes paid (3 000)
Net cash provided from operating activities 81 000
Cash from Investing Activities
Payments for property, plant and equipment (30 000)
Proceeds from sale of property, plant and equipment -----
Net cash from Investing Activities (30 000)
Cash from financing activities
Proceeds from equity 20 000
Proceeds from borrowings 20 000
Repayment of borrowings —
Distributions Paid (50 000)
Net cash flow from financing activities (10 000)
Net increase/decrease in cash for the year 41 000
Cash at beginning of the financial year 0
Cash at the end of the financial year 41 000
7.20 The cash flows below were extracted from the accounts of Miss Mary Mac, a music shop owner.
$
Repayment of Loan 50,000
Sale of property 50,000
Interest received 2,000
Payments to employees 100,000
Receipts from customers 350,000
Expenses paid 30,000
Computer equipment purchase 30,000
Interest paid 1,000
Payments to suppliers 200,000
Income taxes paid 4,000
Beginning cash balance 10,000...