Question 4. ACCT210 The financial statements of Lewis Limited a (18 marks) appea

Question

Question 4. ACCT210 The financial statements of Lewis Limited a (18 marks) appear below: LEWIS LIMITED Comparative Statement of financial positions 31 December 2017 2016 Assets Cash Accounts receivable Merchandise inventory Property, plant, and equipment $ 44,000 23,000 34,000 26,000 20,000 50,000 15,000 78,000 120,000)124,000) $120.000 $126,000 Accumulated depreciation Total $15,00023,000 Accounts payable Income taxes payable Notes payable Ordinary shares 13,000 7,000 41,000 8,000 33,000 24,000 44,000 38,000 Retained earnings Total $120,000 $126,000

Explanation / Answer

Cash received from customers = Account receivable at beg + Credit Sale - Accounts receivable at end

= 34000 + 350000 - 26000

= 358000

Cash paid to supplier = Accounts payable at beg + Purchases - Accounts payable at end

= 23000 + 285000# - 15000

= 293000

#Purchases = Cost of goods sold - Opening inventory + Closing inventory

= 280000 + 20000 - 15000

= 293000

Cash flows from Operating Activities Cash received from customers 358000 Cash paid for Merchandise -293000 Cash paid for expense -24000 Cash paid for interest -4000 Cash paid for income taxes -5000 Net cash Provided by operating activities 32000 Cash flows from investing activities Sale of property and equipment 12000 Net cash used in investing activities 12000 Cash flows from financing activities Proceeds from Issue of shares 17000 Payment of Notes payable -26000 Dividend paid -14000 Net cash Used in financing activities -23000 Net increase in cash 21000 Beginning cash balance 23000 Ending cash balance 44000

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