Refer to the information presented in PA-42 and the supplemental

Refer to the information presented in PA-42 and the supplemental information below:

Sales ......................................................................  $2,000,000
Cost of goods sold ...............................................   1,200,000
Sales and administrative expenses ...................      30,000

Data from PA-42

Robinson Inc. Balance Sheets As at December 31, 2013 and 2014 2014 2013 Assets Cash $ 600,000 $ 400,000 Accounts receivable 1,100,000 1,300,000 Inventory 400,000 600,000 Investments-at fair value through profit or loss 200,000 Investments-financial asset at amortized cost 100,000 Property, plant, and equipment 4,200,000 3,400,000 Accumulated depreciation (2,000,000) (1,500,000)


  • Ordinary shares were redeemed during the year at their book value.
  • The face value of the bonds is $400,000; they pay a coupon rate of 7% per annum. The effective interest rate of interest is 6% per annum.
  • Net income was $100,000.
  • There was an ordinary stock dividend valued at $20,000 and cash dividends were also paid.
  • Interest expense for the year was $100,000. Income tax expense was $50,000.
  • Robinson arranged for a $500,000 bank loan to finance the purchase of equipment.
  • Robinson sold equipment with a net book value of $150,000 (original cost $200,000) for $180,000 cash.
  • Robinson acquired equipment costing $250,000 under a finance lease.
  • Robinson has adopted a policy of reporting cash flows arising from the payment of interest and dividends as operating activities.
  • The at fair value through profit or loss investments are cash equivalents.


Required:
Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...

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