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Question

The cash flows shown below were extracted from the accounts of Jason Taylor, a music shop owner.

  1. Repayment of loan $390 000
  2. Sale of property  390 000
  3. Interest received      1 560
  4. Payment to employees    78 000
  5. Receipts from customers  273 000
  6. Expenses paid     23 400
  7. Computer equipment purchase    23 400
  8. GST paid         780
  9. Payments to suppliers   156 000
  10. Income taxes paid       3 120
  11. Beginning cash balance 7 800


A. Prepare a statement of cash flows using the direct method. (5 marks)


B. Outline some cash flow warning signals. (5 marks)

Step-by-step answer

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Subject: Accounting, Business

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