Question

The following chart is the Accounting Statement of Cashflows. Construct the financial statement of cash flows. Assume taxes are $20 and all taxes are current. Interest expense is $5.

Cash Flows from operating activities
Net income	$41
Add (subtract) items that affect net income and cash flow differently
Depreciation	$18
Gain on sale of plant assets	(8)
Increase in account receivable	(13)
Increase in Interest receivable	(2)
Decrease in Inventory	3
Increase in prepaid expenses	(1)
Increase in account payable	34
Decrease in salary and wage payable	(2)
Decrease in accrued liabilities	(2)
Net Cash Inflow From Investing Activities	68
Cash Flow from Financing Activities
Acquisition of Plant Assets	$(306)
Loan to another company	(11)
Proceeds from sale of plant assets	62
Net Cash Flow from Investing Activities	255
Cash flows from financing activities
Proceeds from issuance of common stock	$101
Proceed from issuance of long-term debt	94
Payment of long-term debt	(11)
Payment of dividends	(17)
Net Cash Flow from Financing Activities	167
Net decrease in cash	(20)
Cash Balance, December 31, 19x1	42
Cash Balance, December 31, 19 x 2	$22

Answer 1

cash Flow statement
Particulars	Amount	Amount
Cash flow From Operating Activities
Net income	41
Depreciation	18
Gain on sale of plant assets	-8
Interest Expense	5
Taxes Paid	20
Operating profit Before Working Capital Change	76
Changes in working capital
Increase in account receivable	-13
Increase in Interest receivable	-2
Decrease in Inventory	3
Increase in prepaid expenses	-1
Increase in account payable	34
Decrease in salary and wage payable	-2
Decrease in accrued liabilities	-2
Operating profit after Working Capital Change	93
Taxes paid	-20.00
Cash inflow From Operating Activities	73.00	73.00
Cash flow From Investing Activities
Acquisition of Plant Assets	-306
Loan to another company	-11
Proceeds from sale of plant assets	62
Cash OutFlow From Investing Activities	-255.00	-255.00
Cash flow From Financing Activities
Interest paid( Finance Costs)	-5.00
Proceeds from issuance of common stock	101
Proceed from issuance of long-term debt	94
Payment of long-term debt	-11
Payment of dividends	-17
Cash inflow From Financing Activities	162.00	162.00
Net Cash Outflow		-20.00
Opening cash		42.00
Closing cash balance		22.00