Question

Tiger Trade has the following cash transactions for the period.

Accounts Amounts
Cash received from sale of products to customers $ 35,000
Cash received from the bank for long-term loan 40,000
Cash paid to purchase factory equipment (45,000)
Cash paid to merchandise suppliers (11,000)
Cash received from the sale of an unused warehouse 12,000
Cash paid to workers (23,000)
Cash paid for advertisement (3,000)
Cash received for sale of services to customers 25,000
Cash paid for dividends to stockholders (5,000)
1. Calculate the ending balance of cash, assuming the balance of cash at the beginning of the period is $4,000.
2. Prepare a statement of cash flows. (Cash outflows should be indicated by a minus sign.)

Answer 1

Cash flow from operating activities

Cash inflows

Cash received from sale of products to customer $35,000

Cash received from sale of services to customer $25,000

Cash outflows:

Cash paid to merchandise suppliers ($11,000)

Cash paid to workers ($23,000)

Cash paid for advertisement ($3,000)

Net cash flow from operating activities $23,000

Cash flow from investing activities

Cash paid to purchase factory equipment ($45,000)

Cash received from sale of warehouse $12,000

Net cash flow from investing activities ($33,000)

Cash flow from financing activities

Dividend paid ($5000)

Cash received from bank loan $40,000

Net cashflow from financing activities $35,000

Net cash increase $25,000

Cash at the beginning of the year $4,000

Cash at the end of the year $29,000