Question

Comparative balance sheet accounts of Secada Inc., which follows IFRS, follow:
Additional data:
1. Cash dividends declared during the year were $21,125.
2. A 20% stock dividend was declared during the year and $25,000 of retained earnings was capitalized.
3. Investments at FV-NI that cost $20,000 and had a fair value at December 31, 2010, of $22,500 were sold during the year for $23,750.
4. Machinery that cost $3,750 and had $750 of depreciation accumulated was sold for $2,200. Secada’s 2011 statement of income is as follows:
Instructions
(a) Calculate net cash flow from operating activities using the direct method.
(b) Prepare a statement of cash flows using the indirect method.
(c) Assume that your investment club is considering investing in Secada Inc. Write a memo to the other members of the club about the company’s cash activities during 2011.
(d) Management wants to provide more captions (headings) in the section on cash flow from operating activities.
Recommend one additional caption that would help achieve that goal.


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  • CreatedAugust 23, 2015
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