Melanie Ltd requires a Statement of Cash Flows to be prepared for the year ended 31 March
Question:
Melanie Ltd requires a Statement of Cash Flows to be prepared for the year ended 31 March 2017; the following information taigagavatgl for this purpose.
As at 31 March: | 2017 | 2016 |
Cash | $55 000 | $33 000 |
Accounts receivable | 20 000 | 30 000 |
Inventory | 15 000 | 10 000 |
Prepaid operating expenses | 5 000 | 1 000 |
Plant and Equipment | 317 000 | 70 000 |
Accumulated depreciation | 14 000 | 6 000 |
Accounts payable | 34 000 | 20 000 |
Long term liabilities | 130 000 | 20 000 |
Share capital | 70 000 | 50 000 |
Retained profits | 164 000 | 48 000 |
| | |
For the year ended 31 March: | 2017 | |
Sales | $507 000 | |
Less expenses: | | |
COGS | 150 000 | |
Depreciation expense | 9 000 | |
Interest expense | 42 000 | |
Loss on sale of equipment | 3 000 | |
Operating expenses | 111 000 | |
Profit before tax | 192 000 | |
Less Income tax expense | 47 000 | |
Profit after tax | $145 000 | |
Additional information:
(i) During the year ended 31 March 2017 an item of equipment, which originally cost $8 000, was sold.
(ii) Melanie Ltd uses the direct method for presenting cash flows from operating activities.
(iii) Classify any dividends paid and interest paid as cash flows from financing activities.
(iv) Several items of plant and equipment were purchased during the year ended 31 March 2017; a long-term liability of $110 000 was specifically arranged for the purchases.
Required:
Prepare a Statement of Cash Flows for Melanie Ltd, for the year ended 31 March 2017, in accordance with NZIAS 7 Statement of Cash Flows. A reconciliation is required to be prepared. GST is not applicable. All workings, in the form of selected general ledger accounts, must be provided.
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott