QUESTION - Company A buys and sets brand jeans from a small factory shop In Keetmanshoop. The company started trading on 01 January 2017.
The following transactions took place n January.
1. Obtained a loan of N$ 50 000 from Namibia Financing Bank to fund the initial operations.
2. Purchased a delivery van for N$ 20 000 paid with cash from the bank loan.
3. Purchased 200 pairs of Jeans from various suppliers on credit for N$ 150 per pair.
4. Sold 200 pairs of jeans far N$ 500 per pair. Half of these jeans were sold for cash, the other half were sold on credit.
5. Paid employees salaries of N$ 4 000 by cheque.
6. Paid the monthly factory-shop rent of N$ 5 000 in cash to the landlord.
7. Interest of N$ 500 accrued on the outstanding loan balance. This interest is payable on the first day of the next month.
8. Depreciation on the delivery vehicle amounted to N$ 600 for the month.
9. Sent a cheque to suppliers in payment of 150 of the 200 pars of leans purchased during the month.
10. Received cash payments for 60 pairs of jeans purchased by debtors during the month. The remainder are expected to pay in February.
REQUIRED:
1. (a) Prepare the statement of profit or loss and other comprehensive income for the month of January.
(b) Calculate Company A's net cash received in January in respect of operating activities.
(c) Calculate the differences between net cash received in respect of operating activities and net profit.
(d) Provide reasons for the difference between not cash received in respect of operating activities and net profit.
2. Prepare the Bank account in the general lodger of Company A for the month of January.
3. Prepare the statement of cash flows for the month of January using the direct method.