Question

Cape Town Manufacturing had the following income statement and balance sheet items (in millions of rands, the South African currency):
Income Statement
For the Year Ended December 31, 20X1
Sales ................. R925
Cost of goods sold ............ (545)
Gross margin .............. 380
Operating expenses .......... (220)
Depreciation .............. (60)
Interest ................ (15)
Income before taxes ........... 85
Income taxes .............. (25)
Net income ............. 60
Cash dividends declared and paid .... (33)
Total increase in retained earnings ..... R 27


During 20X1, Cape Town purchased fixed assets for R315 million cash and sold fixed assets for their book value of R100 million. Operating expenses, interest, and taxes were paid in cash. No long-term debt was retired.
Prepare a statement of cash flows for 20X1. Use the direct method for reporting cash flows from operating activities. Omit supporting schedules.


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  • CreatedFebruary 20, 2015
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