CASH FLOW STATEMENT (22 MARKS)

The following information is available for Canberra Ltd.

Income statement for Canberra Ltd for the period ended 30 June 2019

	$	$
Sales revenue		112,000
Cost of goods sold		(67,200)
Gross profit		44,800
Interest received	11,200
Gain on sale of land	5,600
Total other income		16,800
Rent expense	(8,960)
Loss on sale of building	(1,120)
Depreciation expenses	(16,800)
Other operating expenses	(4,480)
Interest expense	(5,600)
Total expenses		(36,960)
Profit before income tax		24,640
Income tax expense		(7,392)
Profit after income tax		17,248

Balance sheets for Canberra Ltd as at 30 June 2018 and 30 June 2019

	2018	2019
	$	$
CURRENT ASSETS
Cash	12,000	14,400
Accounts receivable	18,000	14,400
Inventory	16,200	19,440
Prepaid rent	12,000	10,800
Prepaid other operating expenses	2,400	2,880
Total current assets	60,600	61,920
NON-CURRENT ASSETS
Land	40,000	38,200
Buildings (at cost)	72,000	67,900
Accumulated depreciation buildings	(36,000)	(40,740)
Equipment (at cost)	50,000	60,000
Accumulated depreciation equipment	(29,000)	(34,800)
Total non-current assets	97,000	90,560
TOTAL ASSETS	157,600	152,480
CURRENT LIABILITIES
Accounts payable	3,000	3,300
Other operating expenses payable	3,000	3,600
Income tax payable	1,000	7,392
Dividends payable	1,000	1,200
Total current liabilities	8,000	15,492
NON-CURRENT LIABILITIES
Loan payable	38,800	34,920
Total non-current liabilities	38,800	34,920
TOTAL LIABILITIES	46,800	50,412
EQUITY
Share capital	79,280	75,680
Retained earnings	31,520	26,388
TOTAL EQUITY	110,800	102,068

Additional information regarding transactions made during 2019:

• Accounts payable recognise only the amounts due to suppliers of inventory.
• A parcel of land with an original cost of $2,400 was sold. Another parcel of land was purchased with cash during the year.
• Buildings with original cost of $24,600 were sold. One more building was purchased with cash during the year.
• Additional equipment was purchased with cash during the year. No equipment was sold.
• A bonus share issue of $400 was declared out of the retained earnings.
• During the year, the company repaid loan amounting to $7,760. In addition, the company bought-back shares amounting to $4,800.
• Canberra Ltd treats both cash paid for interest expense and cash received from interest revenue as cash flow from operating activities, and treats cash paid for dividends as cash flow from financing activities.