Graphene Plastics Company imports graphite from Australia for conversion to graphene to make hockey sticks in Canada.
Question:
Graphene Plastics Company imports graphite from Australia for conversion to graphene to make hockey sticks in Canada. As CEO, you are busy preparing a loan application, which asks for a cash flow statement for the most recent fiscal period. You have the following financial information.Additional information:
During the year, Graphene sold a piece of its equipment. The equipment sold had originally cost $74,000 and was sold for $15,000.
Required
a. Using the information above, prepare Graphene’s statement of cash flows for the year ended October 31, 2024, using the indirect method.
b. Determine the cash flows from operating activities using the direct method.
Assets Cash Accounts receivable (net) Inventory Total current assets Equipment Accumulated depreciation Total assets Liabilities and shareholders' equity Current liabilities: Accounts payable Dividends payable Total current liabilities GRAPHENE PLASTICS COMPANY Comparative Statement of Financial Position Oct. 31, 2024 Loan payable Total liabilities Common shares Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $ 76,000 120,000 210,000 406,000 300,000 (145,000) $ 561,000 $ 80,000 17,000 97,000 108,000 205,000 110,000 246,000 356,000 $ 561,000 Oct. 31, 2023 $ 80,000 135,000 176,000 391,000 230,000 (170,000) $ 451,000 $ 65,000 22,000 87,000 125,000 212,000 110,000 129,000 239,000 $ 451,000
Step by Step Answer:
a b If Direct Method is used Graphene Plastics Company Statement of Cash Flows Indirect ...View the full answer
Understanding Financial Accounting
ISBN: 9781119715474
3rd Canadian Edition
Authors: Christopher D. Burnley
Related Video
In order to determine the amount of cash created by operating operations, the indirect technique for preparing the statement of cash flows entails adjusting net income with changes in balance sheet.
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