a

Calculation
Electricity 150
Insurance 180
Display cabinets 600
GST paid $ 930

b BOOF HEAD
Cash Flow Statement for the year ended 30 June 2025
$ $
OPERATING ACTIVITIES
Cash Sales 50 000
Receipts from Accounts Receivable 25 000
GST Received 5 000 80 000
Payments to Accounts Payable (24 000)
Wages (28 000)
GST Paid (930)
Electricity (1 500)
Insurance (1 800) (56 230)
Net Cash Flows from Operations 23 770
INVESTING ACTIVITIES
Display Cabinets (6 000)
Net Cash Flows from Investing Activities (6 000)
FINANCING ACTIVITIES
Capital Contribution 10 000
Drawings (12 000)
Net Cash Flows from Financing Activities (2 000)

Net Increase (Decrease) in Cash 15 770

Bank Balance at Start (13 500)
Bank Balance at End 2 270
c
Explanation Classified as a Financing Outflow
as it is a cash flow related to a change in the firm’s financial structure
(i.e. it decreases Owner’s Equity)

Reason To keep the bank balance out of overdraft

To help fund the purchase of the display cabinets

Explanation It aids decision-making by classifying sources and uses of funds, allowing the
owner to: identify whether Net Cash Flows from Operations is sufficient to
cover other cash requirements / assess its performance in meeting its cash
targets OR assists in planning for future cash activities by providing a basis
for cash targets for the future (in the next Budgeted Cash Flow Statement).