Basanti Retirement Home Inc. (Basanti) is a privately owned home for seniors who can live independently but prefer the convenience of having meals, cleaning, and nursing assistance available to them.
For each of the following, state whether the item should be classified as an operating, financing, or investing cash flow, whether the item represents a cash inflow or outflow, and the amount that would be reported on the cash flow statement. Explain your reasoning. Assume Basanti uses IFRS.
a. Collected $900,000 in rent from residents.
b. Spent $48,000 in cash renovating the dining room.
c. Paid $25,000 in dividends to the owners.
d. Borrowed $100,000 from the bank.
e. Sold some old furniture of $22,000 cash. There was a loss of $3,000 on the sale.
f. Paid $2,500 to have the carpets in the residence cleaned.
g. Paid nursing staff $175,000 cash
h. Purchased new mattresses on credit. Payment will be made in the next fiscal year.
i. Paid for maintenance work done in the previous fiscal year.

  • CreatedFebruary 26, 2015
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