PROBLEM V-CFS (12 POINTS) The following are the accounting records of the Mindy

Question

PROBLEM V-CFS (12 POINTS) The following are the accounting records of the Mindy Company at the end of 2015 Statement of Income Sales Cost of sales Depreciation expenses Other exDENSE Loss on sale of plant assets Interest Expeose Income Tax Expense $73,000 (25,000) (14,000) (18,000) (3,000) (4,000) (2,000) Net incomen Comparative Balance Sheets 201 201 528,000 42,000 36,000 7,000 150,000 (50,000) 520,000 26,000 21,000 3,000 120,000 (40,000) Cash Plant Assets Accumulated Depreciatiso Total 211,000 150,000 Income Taxes Payableam Common Stock Retained Earoi 94,000 1,000 90,000 28,000 73,000 2,000 40,000 35,000 211.000 150,000 Additional information: A machine with a cost of $12,000 and accumulated depreciation of $4,000, was disposed of for $5,000. This ransaction is important to determine the amount of Plant Assets actually purchased by cash. It isprobably best to use T accounts to hel von determine the increase in Plant Assets. a. b. All of the dividends were cash Analyse Retained Earnings to determine the gnawof dividends. Complete the following, and please show all work. You may detach this sheet but do not forget to submit with your

Explanation / Answer

CASH FLOW STATEMENT FOR THE YEAR ENDING 31/12/2015 PARTICULARS AMOUNT ($) AMOUNT ($) a)NET CASH PROVIDED BY OPERATING ACTIVITIES USING DIRECT METHOD CASH RECEIVED FROM CUSTOMERS (NOTE 1) 57000 CASH PAID TO SUPPLIERS (NOTE 2) -19000 CASH PAID FOR OPERATING EXPENSES (NOTE 3) -22000 INTEREST PAID -4000 INCOME TAX PAID (NOTE-4) -3000 9000 b) NET CASH PROVIDED BY INVESTING ACTIVITIES SALE OF ASSET 5000 PURCHASE OF ASSSET (NOTE - 5) -42000 -37000 c) NET CASH PROVIDED BY FINANCING ACTIVITIES NEW ISSUE OF COMMON STOCK 50000 DIVIDENDS PAID (NOTE -6) -16000 34000 TOTAL INCREASE IN CASH (a+b+c) 6000 BEGINNING CASH 20000 CLOSING CASH 26000 NOTE1: CASH RECEIVED FROM CUSTOMERS PARTICULARS AMOUNT OPENING AMOUNT RECEIVABLE 26000 SALES 73000 LESS: CLSOING AMOUNT RECEIVABLES 42000 CASH RECEIVED FROM CUSTOMERS 57000 NOTE 2: COMPUTATION OF NET PURCHASES PARTICULARS AMOUNT CLOSING INVENTORY -36000 COST OF SALES -25000 LESS: CLSOING INVENTORY 21000 NET PURCHASES -40000 NOTE 2: CASH PAID TO SUPPLIERS PARTICULARS AMOUNT OPENING AMOUNT PAYABLE -73000 PURCHASES -40000 LESS: CLSOING AMOUNT PAYABLE -94000 CASH PAID TO SUPPLIERS -19000 NOTE 3: CASH PAID FOR OPERATING EXPENSES PARTICULARS AMOUNT OTHER EXPENSES -18000 OPENING PREPAID EXPENSES 3000 CLOSING PREPAID EXPENSES -7000 CASH PAID FOR OPERATING EXPENSES -22000 NOTE-4: INCOME TAX PAID PARTICULARS AMOUNT OPENING INCOME TAX PAYABLE -2000 TAXES FOR THE YEAR -2000 LESS: CLOSING INCOME TAX PAYABLE 1000 INCOME TAX PAID -3000 NOTE - 5: PURCHASE OF ASSSET PARTICULARS AMOUNT OPENING PLANT ASSETS 120000 ACCUMULATED DEPRECIATION -40000 SALE OF ASSET -5000 LOSS ON SALE OF ASSET -3000 DEPRECIATION FOR THE YEAR -14000 58000 ACTUAL CLOSING PLANT ASSETS (150000-50000) 100000 PURCHASE OF NEW PLANT 42000 NOTE -6: DIVIDENDS PAID PARTICULARS AMOUNT OPENING RETAIN EARNINGS -35000 NET PROFIT -7000 LESS: CLOSING RETAIN EARNINGS 26000 DIVIDEND PAID -16000

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