The following information is from Clover Company for the year ended 31 December 2017. Collection of principal
Question:
The following information is from Clover Company for the year ended 31 December 2017.
Collection of principal on long-term loan to a supplier R35 000
Acquisition of equipment for cash R10 000
Proceeds from sale of long-term investment a book value R27 000
Issuance of ordinary shares for cash R20 000
Depreciation expense R25 000
Redemption of bonds payable at carrying value R24 000
Payment of cash dividends R9 000
Net income R35 000
Purchase of land by issuing bonds payable R40 000
In addition, the following information is available from the comparative statement of financial position as at 2016 and 2017:
| 2016 | 2017 | |
| Cash | R14 000 | R107 000 |
| Accounts receivable | R15 000 | R20 000 |
| Prepaid insurance | R13 000 | R17 000 |
| Total current assets | R42 000 | R144 000 |
| Accounts payable | R19 000 | R25 000 |
| Salaries payable | R7 000 | R4 000 |
| Total current liabilities | R29 000 | R26 000 |
Required:
3.1 Prepare the statement of cash flows using the indirect method. (15)
3.2 Prepare the statement of cash flows using the direct method. (15)
3.3 Prepare the statement of cash flows using the worksheet approach. (15)
Expert Answer:
1 Cash Flow Statement Indirect Method Note 1 Direct Method Under direct method we also need in... View the full answer
