ADMS 2500 Chapter : Cash Flows Note

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maroonelk473

18 Jan 2012

School

York University

Department

Administrative Studies

Course

ADMS 2500

Professor

John Kucharczuk

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ADMS 2500 Full Course Notes

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Evaluate liquidity/ solvency of business & generate cash internally. *cash equivalent- investment high liquid & 3 months. Convertible to known cash amount, mkt value not affected by interest. (t-bills, bonds car is not) *operating activity- principle revenue producing activities of enterprise. (buy computer to sell) ~inflows- customer receipts of cash dividends, interest received from borrowers. ~outflows- salary, payment to suppliers, taxes/fines, interest paid to lenders. *investing activity- disposal of long-term assets & other investments not classified as cash equivalent. (buy computer to use) ~inflows- sell long-term assets (used furniture) & equity investment, collect loans. ~outflows- purchase long-term assets (property), sales & payment to debt securities. *financing activity- transactions w/ business owners & creditors to borrow/repay amount. ~inflows- issuing equity security, bonds, notes, temporary & long-term liability. ~outflow- pay dividend to holder, purchase treasury shares, loans, owner withdraw. 1-retirement of debt by issuing equity security (pay back debt by shares)

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The Blackbeard Company Ltd provided the following information in regard to its operations for the year ended 30 June 2014:

Cash Book Summary
Opening balance	$20,000	Accounts Payable	$40,000
Accounts receivable	100,000	Bills Payable (suppliers)	20,000
Bills Receivable (suppliers)	20,000	Interest paid	60,000
Debenture Issue	400,000	Operating expenses	180,000
Dividends received	20,000	Salaries & wages	200,000
Interest received	40,000	Current tax payable	80,000
Motor vehicles	60,000	Plant & machinery	100,000
Share capital	200,000	Dividend paid	120,000
		Balance c/d	60,000
	860,000		860,000
Balance b/d	60,000

Required:

(a) Net cash used in operating activities; (b) Net cash used in investing activities; (c) Net cash from financing activities;

(d) Net increase/(decrease) in cash and cash equivalents.

Please use the following format

*Statement of Cash Flows for Blackbeard Company*
*For the Financial Year Ended 30 June 2014*
( i ) Cash flows from Operating Activities	Inflows/	Inflows/
	(Outflows)	(Outflows)










Net cash used in operating activities

( ii ) Cash flows from Investing Activities


Net cash used in Investing Activities

( iii ) Cash flows from Financing Activities

violetcoyote644

For each transaction listed below, indicate where it would be presented on the statement of cash flows.

Investing Activity Cash inflow

Financing Activity Cash inflow

Financing Activity Cash outflow

Investing Activity Cash outflow

Operating Activity Cash Outflow

Operating Activity Cash inflow

This item would not appear on the statement as cash flows

1. cash received as interest from loans that were made to customers

2.purchase of a patent for cash

3.cash received from a bank loan

4.cash received from customers who paid in advance for services to be performed later

5.proceeds from the sale of a building

6.cash paid for rent on a warehouse

Sorry about these values, this thing is kind of messed up. Ihope this can be understood.

The following is the Choco Companyâs balance sheet and incomestatement as of 12/31/2016.

Balance Sheet	2015	2016
Cash Accounts receivable Inventory Long-term investments Total assets Liabilities and stockholdersâ equity: (no value) Accounts payable Salary payable Bonds payable Common stock Retained earnings Total liabilities and stockholdersâ equity	$ 120,000 105,000 225,000 60,000 510,000 120,000 15,000 100,000 125,000 150,000 510,000	21,500 195,000 180,000 -0- 396,500 75,000 24,000 70,000 125,000 102,500 396,500
Income statement
Revenue:(no value) Sales Loss on sales of long-term investment Expenses: (no value) Cost of goods sold Salary expense Net income (loss)		560,000 (7,500) (375,000) (180,000) (2,500)

During 2016, following transactions were made:

Sold long-term investment for a loss of $7,500 (sold for$52,500).

$30,000 of bonds payable matured in 2016.

Paid cash dividends of $45,000.

What is the amount of cash inflow/outflow/ from their customers?(assume Sales are all credit sales)

What is the amount of cash inflow/outflow from the loss on thesales of long-term investment?

What is the amount of cash inflow/outflow from theirsuppliers?

What is the amount of cash inflow/outflow from theiremployees?

What is the amount of cash inflow/outflow from their long-terminvestment?

What is the amount of cash inflow/outflow regarding the maturityof their bonds payable?

What is the amount of cash inflow/outflow regarding the cashdividends?

Using the above balance sheet, income statement and informationfrom a to g, prepare the entire cash flow statement using thedirect method.

Choco Company Statement of Cash Flows For the year ended December 31, 2016
Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities
Cash flows from investing activities: Net cash flows from investing activities
Cash flows from financing activities: Net cash flows from financing activities
Cash balance, 12/31/2016

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ADMS 2500 Chapter : Cash Flows Note

ADMS 2500 Full Course Notes

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