Question 2:

A. Prepare a cash flow statement to calculate closing cash balance using the following particulars:

(a) Cash sales for the year were $1,000,000 and sales on account $1,200,000.

(b) Payments made on accounts payable for inventory totaled $780,000.

(c) Collection against accounts receivable were $760,000. Half this amount pertains to sales revenue earned in the previous year.

(d) Rent expenses for the year: Rent paid in cash $220,000, accrued rent to be paid $20,000.

(e) Capital raised by issue of shares for $4,800,000.

(f) Equipment was purchased for cash $1,680,000.

(g) Dividend amounting to $1,000,000 was declared, but yet to be paid.

(h) $400,000 of dividends declared in the previous year were paid.

(i) An equipment having a book value of $250,000 was sold for $240,000.

(j) opening cash balance $10,000

Cash flow statement of Exclusive Ltd. for the year ended 31st December 2019

Cash flows from operating activities
Cash flows from investing activities
Cash flow from financing activities

B. Give two transactions that appear in cash flow statement but not in income statement and two transactions that appear in income statement but not in cash flow statement.