Cash Flow Statement (Direct Method)

Solution 1: Cash flow statement (Direct Method)
Pharmacy Adelaide Ltd
Cash Flow Statement for the year ending on 30 June, 2019
Method Use: Direct Method
Activities
Amount in
$ Amount in $
Cash flow from operating Activity
Cash Receipts from customer $ 172,940.00
Cash payment to suppliers $ (85,040.00)
Cash Receipts from Consultation Service $ 19,500.00
Cash paid for interest $ (9,240.00)
Cash paid for tax expenses $ (6,270.00)
Cash paid for other expenses $ (13,170.00)
Gain on sale of PPE $ (5,000.00)
Extraordinary adjustment $ (11,250.00)
Net cash inflow from the operating activity $ 62,470.00
Cash flow investing activity
Purchase of PPE $ (141,000.00)
Sale of PPE $ 12,000.00
Sale of Land $ 22,500.00
Cash received from the investing activity $ (106,500.00)
Cash flow from financing activity
Debentures Issued $ 28,130.00
Share Capital Issued $ 57,500.00
Dividend paid $ (50,000.00)
$ 35,630.00
Net increase or decrease in cash from all activities $ (8,400.00)
Add: Beginning Cash balance $ 33,400.00
Ending Cash Balance $ 25,000.00
Working Notes
Working Note 1: Calculation of cash receipts from customer
Sales
$
197,000.00
Add: Opening Account Receivables
$
37,000.00
Less: Closing Account Receivables $

(61,060.00)
$
172,940.00
Working Note 2: Calculation of cash payments to suppliers
Cost of Sales
$
99,460.00
Add: Opening Account Payable
$
48,280.00
Less: Closing Account Payable
$
(62,700.00)
$
85,040.00
Working Note 3: Calculation of cash receipts from consultation Service
Balance in income statement
$
20,500.00
Add: Opening balance
$
1,000.00
Less: Closing balance
$
(2,000.00)
$
19,500.00
Working Note 4: Calculation of cash payments to interest
Balance in income statement
$
2,940.00
Add: Opening balance
$
18,800.00
Less: Closing balance
$
(12,500.00)
$
9,240.00
Working Note 5: Calculation of cash payments to income tax
Balance in income statement
$
7,270.00
Add: Opening balance
$
1,000.00
Less: Closing balance
$
(2,000.00)
$
6,270.00