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    6 views2 pages

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    Syed Faizan Ali

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    of 2

    Grate Big received $10,000 dividends from Tiny Co.

    Solution:

    Operating Activity:
    1. Cash Received: (Revenue, AR)
    800000 – (35000-27000) = 792000

    2. Cash Paid to Supplier: (COGS, Inventory, AP)


    560000 + (200000 – 230000) + (15000-12000) = (533000)

    3. Cash Paid for Interest: (Interest Expense, IP, Bond Premium amortization)
    28050 + (11950- 7350) +1000= (33650)

    4. Cash paid for Income tax: (IT Expense, ITP)


    27980+ (20000-17000) = (30980)

    5. Cash paid for Salary: (Salary Expense, SP)


    80000 + (7000-5000) = (82000)

    6. Other Expenses:
    (71000)

    7. Investing Activity:
    Security: (25000)
    Equipment, net: =500000 – 425000 = 75000
    Investment= 100000-130000= (30000)

    8. Financing Activity:
    Stock= 500000 - 450000= 50000
    Bonds Payable= 60000-70000= (10000)
    Notes Payable= 150000-250000= (100000)
    Premium on Bonds Payable= 5000-4000= (1000)
    Dividends received= 10000

    Now,

    Change= (792000 - 533000 - 33650 - 30980 -82000 - 71000) + (-25000+ 75000 -30000) + (50000- 10000 -
    100000-1000+10000) = 10370

    Now,

    Cash 2002 + Change = Cash 2003

    60000 + 10370 = 70370

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