CHAPTER 7 Statement of cash flows 273Teresa’s statement of cash flows for the period 1–4 April 2016 is shown in illustrative example 7.7.
ILLUSTRATIVE EXAMPLE 7.7Statement of cash flows
Teresa’s Carpets and Rugs
Statement of cash flows for the period 1–4 April 2016Cash inflows
Proceeds from loan
Proceeds from capital (equity) contributed$50 000
20 000
Total cash inflows 70 000
Cash outflows
Purchase of shop fittings
Lease payment20 000
10 000
Total cash outflows 30 000
Net cash flow 40 000
Beginning cash balance —
Ending cash balance $40 000Teresa needs to purchase her inventory of rugs and carpets. She approaches several companies and
decides to buy her inventory from Carpetable Pty Ltd. On 5 April, she selects a range of small, medium
and large rugs and carpets of varying textures, colours and fabrics from Carpetable Pty Ltd at a cost of
$35 000, delivered immediately and payable in 28 days.
Teresa’s balance sheet as at 5 April 2016 and statement of cash flows for the period 1–5 April 2016 are
shown in illustrative examples 7.8 and 7.9.
ILLUSTRATIVE EXAMPLE 7.8Balance sheet
Teresa’s Carpets and Rugs
Balance sheet as at 5 April 2016Assets
Current
Cash
Inventory$ 40 000
35 000Liabilities
Current
Accounts payable $ 35 000
Non-current
Non-current Loan 50 000
Shop fittings
Lease prepayment20 000
10 000Equity
Capital contributed — T Tang 20 000
$ 105 000 $ 105 000