Prepare the statement of cash flows for B Ltd for the year ended 31 December 2013 using
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Question:
Prepare the statement of cash flows for B Ltd for the year ended 31 December 2013 using the direct method.
The condensed trial balances of B Ltd at 31 December 2012 and 2013 are as follows: | 2013 | 2012 |
Debits | ||
Property | $1 750 000 | $1 400 000 |
Motor vehicles | $ 436 000 | $ 410 000 |
Machinery | $ 385 000 | $ 370 000 |
Inventory | $ 178 000 | $ 154 000 |
Trade and other receivables | $ 214 000 | $ 220 000 |
Cash in bank | - | $ 76 000 |
Other financial assets: investments at fair value | $ 20 000 | $ 40 000 |
$2 983 000 | $2 670 000 | |
credits | ||
Ordinary share capital | $400 000 | $300 000 |
Share premium | $ 40 000 | $ 30 000 |
Revaluation of property | $200 000 | - |
Reserve for asset replacement | $20 000 | $10 000 |
Retained earnings | $991 000 | $ 870 000 |
Interest free loan | $900 000 | $1 100 000 |
Accumulated depreciation – motor vehicles | $76 000 | $54 000 |
Machinery | $141 000 | $120 000 |
Trade and other payables | $139 000 | $142 000 |
Bank overdraft | $ 8 000 | - |
Tax payable | $ 44 000 | $ 28 000 |
Dividends payable (ordinary) | $ 24 000 | $ 16 000 |
2 983 000 | 2 670 000 | |
Revenue | $750 000 | |
Cost of sales | ($300 000) | |
Gross profit | $450 000 | |
Other income | $4 000 | |
Administrative and selling expenses | ($208 000) | |
Other expenses | ($6 000) | |
Profit before tax | $240 000 | |
Income tax expense | ($85 000) | |
Profit for the year | $ 155 000 | |
Other comprehensive income | - | |
Profit on revaluation of land | $204 000 | |
Total comprehensive income for the year | $359 000 | |
1. Extract from the statement of changes in equity for the year ended 31 December 2013.
Reserve for asset replacement | Retained earnings | Total | |
Profit for the year | $155 000 | $ 155 000 | |
Dividends declared Transfer to reserve | - $10 000 | ($24 000) ($10 000) | ($24 000) |
2. A new motor car was purchased for $54 000. An old vehicle was sold at its carrying amount on 31 December 2013.
3. A machine with a carrying amount of $60 000 and on which $51 000 had already been written off in depreciation was traded in for $54 000
and replaced with a new machine.
4. Depreciation for the current year is : Vehicles $48 000, and Machinery $72 000
5. The investment was sold on 28 February 2013 for $24 000.
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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