The Following Information Is Produced on an Accrual Basis and Relates

question 32

Essay

The following information is produced on an accrual basis and relates to Emily's Superior Photo Framers.
Statement of comprehensive mcome for the
year ended 31 December 2018 $\begin{array}{lll}\text { Income}&\$80,880\\\text { Less Photo framing supplies used}&14,500\\&66,380\end{array}$
Less Other Expenses
$\begin{array}{ll}\text { Advertising } & \$ 250 \\\text { Salaries } & 18250 \\\text { Vehicle expenses } & 5300 \\\text { Office expenses } & 3500 \\\text { Rent of premises } & 20000 \\\text { Interest expenses } & 2000 \\\text { Depreciation of equipment } & 3600&52,900\\\text { Profit }&&\$13,480\end{array}$ Statement of financial position as at 31 December 2018
$\begin{array}{lll}&2017&&2018\\\text { Cunrent Assets } & \$ && \$ \\\text { Cash at bank } & 20500 && 4030 \\\text { Accounts receivable } & 1500 && 1650 \\\text { Stock of photo framing supplies } & 5500 && 3500\\&27,500&&9,180\\\text { Fixed Assets } & \\\text { Photo Framing Equipment } & 55700 &&65,000\\\text { Less Accumulated Depreciation } & 11200&44,500&14,800&50,200\\&&\$72,000&&\$59,380\end{array}$ Current Liabilities
$$\begin{array} { l l } \text { Creditor owed for vehicle expenses } & - &1900\\\text { Long Term Liabilities } & \\\text { Loan Finance Co, repayable by 2020 } &18,000&15,000\\&18,000&16,900\end{array}$$ Equity
$\begin{array}{lll}\text { Capital - Emily } & 34,000 & 34,000 \\\text { Current account Emily } & \underline{20,000} & \underline{8,480} \\& 54,000 & 42,480\\&\$72,000&\$59,380\end{array}$ Additional Information:
• Emily withdrew $25 000 through the year for her own use.
• No photo framing equipment was sold during the year.
REQUIRED:
a)Prepare a classified statement of cash flows for the year ended 31 December 2018 from the above information. Show all workings.
b)Prepare a statement reconciling profit with cash flow from operating activities.
c)Comment on what the statement of cash flows reveals about the cash situation of Emily's Superior Photo Framers.
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Definitions:

Message

A piece of communication or information conveyed from one person or entity to another.

Visual Aids

Tools such as diagrams, charts, videos, or models used to enhance understanding or retention of information by making it more visually appealing.

Choppy Presentation

A presentation characterized by abrupt transitions and a disjointed or fragmented style.

Disjointed

Lacking a coherent or logical sequence or connection, resulting in a fragmented or disorganized structure.