The following information shows the financial statements of Home Dcor Pty Ltd. Statement of Financial Position...

   

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The following information shows the financial statements of Home Décor Pty Ltd. Statement of Financial Position for the Non-Current Assets Property, plant and equipment Accumulated depreciation on PPE Long-term investments Current Assets Inventory Accounts receivable Prepaid expenses Cash and cash equivalents Total Assets Equity and Liabilities Equity year ended: 2022 R 727 000 956 000 (299 000) 70 000 261 000 126 000 85 000 18 000 32 000 988 000 846 000 2021 R 683 000 910 000 (285 000) 58 000 235 000 60 000 25 000 20 000 130 000 918 000 750 000 Ordinary share capital Retained earnings Long-Term Liabilities Bonds payable Current Liabilities Accounts payable Income tax payable Total Equity and Liabilities 414 000 432 000 Sales Cost of sales Gross profit Operating expenses Depreciation expense 87 000 87 000 55 000 16 000 39 000 988 000 410 000 340 000 105 000 105 000 63 000 15 000 48 000 918 000 Statement of Comprehensive and Other Income for the year ended 31 December 2022 R 900 000 (546 000) 354 000 (120 000) (24 000) Operating profit Interest expense Loss on sale of equipment Profit before tax Income tax expense Net profit for the year Additional information: i) Sold equipment with a book value of R11 000 (R21,000 cost R10,000 accumulated depreciation) for R5 000 cash. ii) Purchased equipment for R67 000 cash. iii) Declared and paid R32 000 in cash dividends. 210 000 (15 000) (6 000) 189 000 1 (65 000) 124 000 Require: Use the information provided to prepare the statement of cash flows using the indirect method. (25) The following information shows the financial statements of Home Décor Pty Ltd. Statement of Financial Position for the Non-Current Assets Property, plant and equipment Accumulated depreciation on PPE Long-term investments Current Assets Inventory Accounts receivable Prepaid expenses Cash and cash equivalents Total Assets Equity and Liabilities Equity year ended: 2022 R 727 000 956 000 (299 000) 70 000 261 000 126 000 85 000 18 000 32 000 988 000 846 000 2021 R 683 000 910 000 (285 000) 58 000 235 000 60 000 25 000 20 000 130 000 918 000 750 000 Ordinary share capital Retained earnings Long-Term Liabilities Bonds payable Current Liabilities Accounts payable Income tax payable Total Equity and Liabilities 414 000 432 000 Sales Cost of sales Gross profit Operating expenses Depreciation expense 87 000 87 000 55 000 16 000 39 000 988 000 410 000 340 000 105 000 105 000 63 000 15 000 48 000 918 000 Statement of Comprehensive and Other Income for the year ended 31 December 2022 R 900 000 (546 000) 354 000 (120 000) (24 000) Operating profit Interest expense Loss on sale of equipment Profit before tax Income tax expense Net profit for the year Additional information: i) Sold equipment with a book value of R11 000 (R21,000 cost R10,000 accumulated depreciation) for R5 000 cash. ii) Purchased equipment for R67 000 cash. iii) Declared and paid R32 000 in cash dividends. 210 000 (15 000) (6 000) 189 000 1 (65 000) 124 000 Require: Use the information provided to prepare the statement of cash flows using the indirect method. (25)

Answer rating: 100% (QA)

To prepare the statement of cash flows using the indirect method we need to analyze the changes in the companys balance sheet accounts and incorporate ... View the full answer