308 Accounting: Business Reporting for Decision Making
Exercises
BASIC | MODERATE | CHALLENGING
7.15 LO3
The following T-account shows the transactions in the cash account during the month.
Cash
Opening balance
Receipts from customers
Dividends received
Sale of motor vehicle
Proceeds from loan$ 10 000
156 000
3 000
16 000
30 000Drawings paid
Payments for wages
Payments for inventory
Expenses payments
GST paid
Interest paid
Closing balance$ 10 000
54 000
70 000
6 000
5 000
3 000
67 000
$215 000 $215 000Required
Prepare a statement of cash flows based on the cash account.7.16 LO3
Three sisters formed a partnership, SkinDeep, to sell skincare products made from organic
ingredients. They have been operating for one year. The bank balance at the end of the year is
$69 000. A summary of business transactions is as follows.Sales to customers
Receipts from customers
Payments for inventory
Payments for electricity, telephone, rent and insurance
Purchase of a motor vehicle
Drawings
Payment of interest
Loan proceeds
Interest received
Equity injection$256 000
217 000
98 000
5 000
26 000
50 000
8 000
21 000
1 000
21 000Required
Prepare a statement of cash flows.7.17 LO2
In what section of the statement of cash flows (operating, investing or financing) would each of the
following items appear?
a. Purchase of property, plant and equipment
b. Proceeds from a bank loan
c. Collections from customers
d. Gain/loss from the sale of equipment
e. Cash proceeds from the sale of equipment
f. Dividends to shareholders
g. Proceeds from an equity raising
h. Retirement of debt
i. Change in accounts receivable
j. Profit.
7.18 LO1
Consider the following transactions.
i. Credit purchases, $10 000
ii. Cash paid to suppliers, $12 000
iii. Credit sales, $16 000
iv. Cost of sales, $12 000
v. Cash payments received on accounts receivable, $16 000