581 1232 AM udmoodleudacae ill etisalat Question 3 Preparat

@ 58%.1, 12:32 AM udmoodle.ud.ac.ae ill etisalat Question 3: Preparation and Presentation of the Cash Flow Statement You are employed as the accounts executive for Mixed Radar Limited. Your superior has gone on vacation and requires you to prepare some financial statements. The abbreviated balance sheet of Mixed Radar Limited as at December 31, 2021 and December 31, 2022 are illustrated below 2021 2022 urrent Assets Plant and E (at Cos) I$760,000.0 920,000.0 $288,000. 18,000 $472,000,0 $186,000.0 $658,000.0 Plant and at Net) S602.000 ( Total Non-Current Assets $816,000 urrent Assets nvent rade Receivables ash and Cash Equivalents 397,000 $596,000.0 $332,000.0 Total Current Assets $933,000.0 $789,000 Total Assets Liabilities and Owners\' Equity iabilities urrent Liabilities 12% Debentures Total Non-Current Liabiliies 400,000.0 400,000.0 S100,000 S100,000 urrent Liabilities $478,000.0 $64,000.0 $87,000.0 rade Payables $396,000.0 rued Ex ncome Tax Payable $96,000 S0.0 S22,000 Total Current Liabilities S629,000.0 otal Liabilities $686,000 Owners\' Equit $350,000.0 S75,000.0 $137,000,0 $562,000.0 S300,000.0 $294,000 $919,000.0 Total Owners\' F Total Liabilities and Shareholders 1,591,000 1605,000

Solution

STATEMENT OF CASH FLOWS Cash flow from operating activities: Net income (294000-137000+25000) 182000 Adjustments to reconcile net income with cash from operating activitites: Dividend income (to be reported under investing) -17000 Impairment of investments 20000 Depreciation 64000 Profit from sale of equipment -16000 Decrease in inventory (596000-397000) 199000 Increase in trade receivables (392000-332000) -60000 Decrease in trade payables (478000-396000) -82000 Increase in accrued expenses (72000-64000) 8000 Increase in income tax payable (96000-87000) 9000 125000 Net cash from operating activitites 307000 Cahs flow from investing activities: Sale of equipment 54000 Dividend income 17000 Purchase of investments (214000-186000+20000) -48000 PPE purchased (920000-760000+72000) -232000 Net cash used by investing activities -209000 Cash flow from financing activities; Common stock sold (500000+125000-350000-75000+75000) 275000 Cash dividends paid -25000 Redemption of debentures (300000*125%) -375000 Increase in overdraft 22000 Net cash used by financing activitiew -103000 Increase in cash and cash equivalents -5000 Beginning cash and cash equivalents 5000 Ending cash and cash equivalents 0