1. Cash Flow Statement Exercise 1
1. The following is the Cash-at-Bank account of Rendezvous Partnership. It shows the cash
transactions for the year 2014:
Cash-at-Bank
Jan 1 Balance $4570 Jan 14 Drawings $13500
Jan 12 Sales $25900 Feb 8 Inventory $7950
Feb 8 M. Vehicle $4500 Mar 23 Loan $5500
Apr 12 Loan $8500 May 19 Wages $2300
Jun 29 Interest rev. $300 Jun 18 Machinery $8030
Jul 3 Debtors $4570 Aug 21 Selling Exp. $2240
Aug 10 Capital $10000 Sept 6 Office Equip. $790
Oct 17 General Exp. $3200
Nov 24 Creditors $6830
Dec 31 Balance $8000
$58340 $58340
a) Based on the information above, prepare a cash flow statement for the business for the year
ended 31 Dec 2014.
b) Describe the overall cash position of the business and explain why the business’ cash has
increased/decreased during the accounting period.
c) Suggest 2 ways to improve the cash flow of the business (hint: look at the activities with
negative net cash flow for clues).
2. The Sprite Way Ltd. has given you the record of its cash transactions for the year ended 2014.
You are asked to prepare a cash flow statement on 2014 for the business:
Cash at Bank a/c
Jan 1 Balance $12400 Feb 4 Creditors $10740
Feb 2 Bank Loan $35000 Feb 28 Interest Exp. $750
Mar 13 Sales $24500 Mar 16 Loan $25500
Apr 20 Rent Rev $7200 Apr 23 Building $52300
Jun 8 Debtors $5300 May 10 Inventory $6150
Jul 24 Debtors $4570 Jul 5 Drawings $7400
Aug 15 Capital $10000 Aug 19 Drawings $2100
Sept 17 Sales $5200 Oct 12 Wages $13200
Oct 29 Shares (I) $5400 Nov 26 Creditors $6830
Dec 31 Balance $20370 Dec 14 Advertising $4970
129940 129940
a) Prepare a cash flow statement for the business using the information above.
b) Describe the overall cash position of the business and explain why the business’ cash has
increased/decreased during the accounting period.