Question 1 Blue River Mountain Resort had the following cash transactions over the financial year ending...

 

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Question 1 Blue River Mountain Resort had the following cash transactions over the financial year ending 30 June 2022. Opening cash balance, 1 July 2021 was $5,500. Transaction Acquisition of building Received loan funds Payment to employees Income Tax paid Sold machinery Drawings Paid bank interest Paid suppliers for inventory Cash sales Amount $675,000 $250,000 $52,800 $4,250 $220,000 $6,000 $1,529 $109,075 $305,350 a. Prepare a Cash Flow statement for Blue River Mountain Resort for the year ending 30 June 2022 using the information provided. [6 marks] b. Explain why sales made on credit terms are not included in the Cashflow Statement. Your answer should include an explanation of the difference between accrual and cash accounting (max 300 words). [5 marks] c. Explain whether this business could possibly have a profit in the Income Statement. Explain your answer by providing an example. (max 300 words). [4 marks] [Total for Question 1 = 15 marks] Question 1 Blue River Mountain Resort had the following cash transactions over the financial year ending 30 June 2022. Opening cash balance, 1 July 2021 was $5,500. Transaction Acquisition of building Received loan funds Payment to employees Income Tax paid Sold machinery Drawings Paid bank interest Paid suppliers for inventory Cash sales Amount $675,000 $250,000 $52,800 $4,250 $220,000 $6,000 $1,529 $109,075 $305,350 a. Prepare a Cash Flow statement for Blue River Mountain Resort for the year ending 30 June 2022 using the information provided. [6 marks] b. Explain why sales made on credit terms are not included in the Cashflow Statement. Your answer should include an explanation of the difference between accrual and cash accounting (max 300 words). [5 marks] c. Explain whether this business could possibly have a profit in the Income Statement. Explain your answer by providing an example. (max 300 words). [4 marks] [Total for Question 1 = 15 marks]

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