Required:

Prepare a statement of cash flows of Home from Home for the year ended 31 December 20X6. - Direct Method should be used.

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Larry Lord owns a house near a university and rents the house to students. His business entity is known as Home from Home. The trial balance of Home from Home at 31 December 20X6 as well as the summarised statement of profit or loss for the year ended 31 December 20X6, together with comparative figures for 20X5, are shown below: HOME FROM HOME TRIAL BALANCE AT 31 DECEMBER Bank Capital: 1 January Accounts payable Accounts receivable Distributions Furniture and equipment: carrying amount Land and buildings: carrying amount Long-term loan Profit for the period HOME FROM HOME STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER Income Rent Operating expenses Depreciation: furniture and equipment Depreciation: buildings Administration expenses Profit for the period Dr 1 000 2500 10 000 14 000 120 000 147 500 20X6 Cr 75 000 500 60 000 12 000 147 500 20X6 £ • 24 500 (12 500) 1.500 2 500 8 500 12 000 Dr 20X5 2 000 11 000 14 500 100 000 127 500 2 500 7 000 Cr 500 75.000 1 000 20X5 £ 22 500 (11 500) 2 000 11 000 40 000 11 000 127 500 Larry Lord owns a house near a university and rents the house to students. His business entity is known as Home from Home. The trial balance of Home from Home at 31 December 20X6 as well as the summarised statement of profit or loss for the year ended 31 December 20X6, together with comparative figures for 20X5, are shown below: HOME FROM HOME TRIAL BALANCE AT 31 DECEMBER Bank Capital: 1 January Accounts payable Accounts receivable Distributions Furniture and equipment: carrying amount Land and buildings: carrying amount Long-term loan Profit for the period HOME FROM HOME STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER Income Rent Operating expenses Depreciation: furniture and equipment Depreciation: buildings Administration expenses Profit for the period Dr 1 000 2500 10 000 14 000 120 000 147 500 20X6 Cr 75 000 500 60 000 12 000 147 500 20X6 £ • 24 500 (12 500) 1.500 2 500 8 500 12 000 Dr 20X5 2 000 11 000 14 500 100 000 127 500 2 500 7 000 Cr 500 75.000 1 000 20X5 £ 22 500 (11 500) 2 000 11 000 40 000 11 000 127 500 Larry Lord owns a house near a university and rents the house to students. His business entity is known as Home from Home. The trial balance of Home from Home at 31 December 20X6 as well as the summarised statement of profit or loss for the year ended 31 December 20X6, together with comparative figures for 20X5, are shown below: HOME FROM HOME TRIAL BALANCE AT 31 DECEMBER Bank Capital: 1 January Accounts payable Accounts receivable Distributions Furniture and equipment: carrying amount Land and buildings: carrying amount Long-term loan Profit for the period HOME FROM HOME STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER Income Rent Operating expenses Depreciation: furniture and equipment Depreciation: buildings Administration expenses Profit for the period Dr 1 000 2500 10 000 14 000 120 000 147 500 20X6 Cr 75 000 500 60 000 12 000 147 500 20X6 £ • 24 500 (12 500) 1.500 2 500 8 500 12 000 Dr 20X5 2 000 11 000 14 500 100 000 127 500 2 500 7 000 Cr 500 75.000 1 000 20X5 £ 22 500 (11 500) 2 000 11 000 40 000 11 000 127 500 Larry Lord owns a house near a university and rents the house to students. His business entity is known as Home from Home. The trial balance of Home from Home at 31 December 20X6 as well as the summarised statement of profit or loss for the year ended 31 December 20X6, together with comparative figures for 20X5, are shown below: HOME FROM HOME TRIAL BALANCE AT 31 DECEMBER Bank Capital: 1 January Accounts payable Accounts receivable Distributions Furniture and equipment: carrying amount Land and buildings: carrying amount Long-term loan Profit for the period HOME FROM HOME STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER Income Rent Operating expenses Depreciation: furniture and equipment Depreciation: buildings Administration expenses Profit for the period Dr 1 000 2500 10 000 14 000 120 000 147 500 20X6 Cr 75 000 500 60 000 12 000 147 500 20X6 £ • 24 500 (12 500) 1.500 2 500 8 500 12 000 Dr 20X5 2 000 11 000 14 500 100 000 127 500 2 500 7 000 Cr 500 75.000 1 000 20X5 £ 22 500 (11 500) 2 000 11 000 40 000 11 000 127 500

Answer rating: 100% (QA)

CALCULATIONS Operating Activities Cash received from customers Rent 20X6 Rent 24500 Cash paid for op... View the full answer