Reference no: EM132458680
Problem - Cash Flow Statement
The following information relates to Blackwolf Ltd.:
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Blackwolf Ltd. Comparative Balance Sheet As At 30 June 2010 and 2009
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|
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2010 $
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2009 $
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Cash
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25,000
|
19,000
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Account receivable
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176,000
|
82,000
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Inventory
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117,000
|
64,000
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Buildings
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31,000
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51,000
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Acc. depreciation - buildings
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(15,000)
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(15,000)
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Equipment
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30,000
|
55,000
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Acc. depreciation - equipment
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(5,000)
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(16,000)
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Total assets
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359,000
|
240,000
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|
|
|
|
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Accounts payable
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107,000
|
62,000
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Accrued expenses
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5,000
|
6,000
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Interest payable
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5,000
|
2,000
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Income tax payable
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10,000
|
4,000
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Short-term loan
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3,000
|
5,000
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Share capital
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98,000
|
88,000
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Retained profit
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131,000
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73,000
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Total liabilities & shareholders' equity
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359,000
|
240,000
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Additional information during the year:
ALL sales and expenses are on credit.
A building with original cost of $20,000 and accumulated depreciation of $5,000 was saold cash for a price of $20,000.
A piece of equipment with an original cost of $25,000 and accumulated depreciation of $15,000 was sold cash for a price of $5,000.
Blackwolf Ltd had a net profit of $67,000 this year.
Required -
1. Using the indirect method prepare the reconciliation of Net Profit for Cash flows from Operations.
2. Indicate which Blackwolf's stage of life-cycle and what evidence you use to support this selection.