Rusabh Ltd

question 32

Essay

Rusabh Ltd.'s policy is to report all cash flows arising from interest and dividends in the operating section.Rusabh's activities for the year ended December 31,2018 included the following:
• Sold a held-for-trading investment for $16,000.The book value of this investment,which was not designated as a cash equivalent,was $13,000.
• Purchased an available-for-sale investment for $51,000.
• Borrowed $100,000 from the bank for investment purposes.
• Sold equipment for $23,000 that originally cost $55,000.The net book value of this item at time of sale was $35,000.
• Purchased inventory costing $84,000 for cash.
• Received $8,000 in interest and 5,500 in dividends on sundry investments.
• Acquired a forklift costing $32,000 under a finance lease.
• Acquired land and buildings valued at $100,000 by issuing ordinary shares.
• Bought $400,000 in bonds at a discount,paying $375,000 cash.
Required:
a.Prepare the cash flows from investing activities section of the statement of cash flows.
b.Identify how the activities listed above that are not investing activities would be reported in the statement of cash flows assuming that the statement is prepared using the indirect method.

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Definitions:

SSE

Sum of Squared Errors, a measure used in statistics to indicate the difference between the observed and predicted values by a model.

Coefficient Of Correlation

A numerical measure that quantifies the degree to which two variables are correlated, indicating the strength and direction of their relationship.

Coefficient Of Determination

A measure used in statistical analysis that assesses how well a model explains and predicts future outcomes, often denoted as R^2.

Coefficient Of Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two variables.