The following information relates to Hunter a small private company. It consists of an opening statement of
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Question:
The following information relates to Hunter a small private company. It consists of an opening statement of financial position as at 1 April 20X3 and a listing of the company’s ledger accounts at 31 March 20X4 after the draft operating profit before interest and tax (of
$17,900) had been calculated. HUNTER
STATEMENT OF FINANCIAL POSITION AS AT 1 APRIL 20X3
$ | |
Non-current assets | |
Land & Buildings (at valuation of $49,200 less accumulated depreciation of $5,000) | 44,200 |
Plant (at cost of $70,000 less accumulated depreciation of $22,500) | 47,500 |
Investments at cost | 16,900 |
108,600 | |
Current Assets | |
Inventory | 57,400 |
Trade Receivables | 28,600 |
Bank | 1,200 |
Total assets | 195,800 |
Equity & Liabilities | |
Equity | |
Ordinary shares of $1 each | 25,000 |
Share Premium | 5,000 |
Revaluation Reserve | 12,000 |
Retained Earnings | 70,300 |
112,300 | |
Non-current liabilities | |
8% loan notes | 43,200 |
Current liabilities | |
Trade payables | 31,400 |
Taxation | 8,900 |
Total equity and liabilities | 195,800 |
Ledger accounts
DR $ | CR $ | |
Ordinary shares of $1 each | 50,000 | |
Share Premium | 8,000 | |
Retained earnings-1 April 20X3 | 70,300 | |
Profit before interest and tax-year to 31 March 20X4 | 17,900 | |
Revaulation reserve | 18,000 | |
8% loan notes | 39,800 | |
Trade payables | 26,700 | |
Accrued loan interest | 300 | |
Taxation | 1,100 | |
Land & Buildings at valuation | 62,300 | |
Plant at cost | 84,600 | |
Buildings- accumulated depreciation 31 March 20X4 | 6,800 | |
Plant- accumulated depreciation 31 March 20X4 | 37,600 | |
Investments at cost | 8,200 | |
Trade receivables | 50,400 | |
Inventory-31 March 20X4 | 43,300 | |
Bank | 1,900 | |
Investment income | 400 | |
Loan Interest | 1,700 | |
Ordinary dividend | 26,100 | |
277,700 | 277,700 |
Notes:
- There were no disposals of land and buildings during the year. The increase in revaluation reserve was entirely due to the revaluation of the company’s land.
- Plant with a net book value of $12,000 (cost $23,500) was sold during the year for
$7,800. The loss on sale has been included in the profit before interest and tax.
- Investments with a cost of $8,700 were sold during the year for $11,000. The profit has been included in the profit before interest and tax. There were no further purchase of investments.
- On 10 October 20X3 a bonus issue of 1 for 10 ordinary shares was made utilizing the share premium account. The remainder of the increase in ordinary shares was due to an issue for cash on 30 October 20X3.
- The balance of the taxation account is after the settlement of the provision made for the year to 31 March 20X3. A provision for the current year has not been made.
Required:
From the above information, prepare a statement of cash flows for Hunter using the indirect method in accordance with IAS7 Statement of Cash Flows for the year ended 31 March 20X4.
Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-1259569197
8th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Olds
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