Answer:
Closing Cash and Cash equivalents balance is $70,100 as per the statement of cash flows presented below in indirect format. the closing figure matches the balance sheet sheet figure of cash and cash equivalents for the current year.
For year reference, solution in excel format is also attached
Explanation:
Statement of Cash Flows for year ended 31 December 20x1
Net Profit before tax (Net Income + Tax) $79,000
Adjustment of Non Cash Expenses:
Depreciation $17,000
Increase in Salaries & Wages Payable $1,100
Working Capital Changes:
Increase in Inventory $(2,400)
Decrease in Accounts Receivables $5,400
Decrease in Accounts Payable $(11,400)
Cash generated from Operations $88,700
Tax Paid $(27,000)
Net cash from operating activities $61,700
<u>Cash Flows from Investing Activities:</u>
Purchase of equipment $(77,000)
Net cash from investing activities $(77,000)
<u>Cash Flows from Financing Activities:</u>
Proceeds from issue of shares $34,000
Payment of long term loans $(17,000)
Dividends paid $(5,400)
Net cash from Financing Activities $11,600
Net decrease in cash and cash equivalents $(3,700)
Opening cash and cash equivalents $73,800
Closing Cash and Cash Equivalents $70,100
