Sentrino Company Uses the Direct Method for Its Statement of Cash

question 119

Essay

Sentrino Company uses the direct method for its statement of cash flow. Assume Accrued Liabilities relate to Operating Expenses. It reports the following information regarding the year ending December 31, 2014: Assume that there were no sales of long-term assets, no Interest Revenue, and no expenses other than the expenses shown above. Also, assume that Accounts Payable is for purchases of inventory only. Prepare the operating activities section of the statement of cash flows.

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Definitions:

Debt-to-Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets.

Solvency

The ability of an entity to meet its long-term financial obligations and continue its operations into the foreseeable future.

ASPE

Accounting Standards for Private Enterprises; a set of accounting practices and standards for private companies in Canada.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that serve as a global framework for preparing financial statements.