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Chapter
5 /
Cas h Flow Statemen ts
(lAS
7)
45
$30 000
$41.250
$...l.llilQ
15,000
(2,250)
3,000
18,750
(7,500)
.J..QQQ
45,000
3,750
(Uill!)
11,250
4500
Cash fl ows from investing activities:
Proceeds from the sale of equipment
Dividends received
Cash flows from investing activities
Cash jl ows from fi nancing activities:
Dividends paid
(18 000)
Cash !lows used in financing activities
(l8..QQQ)
Net increase in cash and cash equiva lents
3,000
Cash and cash equivalents, beginning of year
---l..iQQ
Cash and cash equivalents, end of year
$~
Details of the computations of amounts shown in the statement of cash !lows fo llow:
Cash Received from Customers during the Year
Credit sales
Plus: Accounts receivable, beginning of year
Less: Accounts receivable, end of year
Cash collections from customers during the year
Cash Paid to Suppliers and Employees
Cost of sales
Less: Inventory, beginning of year
Plus: Inventory, end of year
Plus: Accounts payable, beginning of year
Less: Accounts payable, end of year
Plus: Administrative and selling expenses paid
Cash paid to suppliers and employees during the year
Interest paid equals interest expense charged to the income statement
(per additional information)
Income Taxes Paid during the Year
Tax expense during the year (comprising current and deferred portion s)
Plus: Income taxes payable, beginning of year
Plus: Deferred taxes payable, beginning of year
Less: Income taxes payable, end of year
Less: Deferred taxes payable, end of year
Cash paid toward income taxes
Proceeds from sale of equipment (per additional information)
Dividends received during 2005 (per additional information)
Dividends paid during 2005 (per additional information)
c .
Ind ire ct Method
6,000
1,500
3,000
(3,000)
(4 500)
$ 3000
$l..l.,22Q
$~
$ 18 000
Tremendous Enterprises II/c.
STATEMENT OF CASH FLOWS
For the Year Ended December 31, 2005
Cash flows fro m
operating activities:
Net income before taxation
Adjustments for:
Depreciation of property, plant, and equipment
Amortization of intangible assets
Investment income
Interest expense
Operating income before changes in operating assets and
liabilities
Increase in accountsreceivable
Increase in inventories
Decrease in accounts payable
Cash provided
by
operations
Interest paid
Income taxes paid
Net cash fromoperating activities
Cash flow s from investing activities:
Proceeds from sale of equipment
Dividends received
Cash from investing activities
Cash flow s f romfinancing activities:
Dividends paid
Cash used in financing activities
Net increase in cash and cash equivalents
Cash andcash equivalents. beginning of year
Cash andcash equivalents. end of year
$
24,750
3,000
750
(4,500)
--lJ)QQ
27,000
(3,750)
(750)
uiza»
11,250
(3,000)
..L1.QQQl
11,250
-A,2QQ
(.lJWQQ)