The following information has been extracted from the financial records of Nocturnes Ltd:

Additional information:

1. Nocturnes Ltd uses the direct method to report cash flows from operating activities.

2. The entity classifies dividends paid as an operating cash flow and interest paid as a financial cash flow.

3. An item of equipment, with an original cost of $3 301, was sold during the year.

4. An item of equipment was purchased for $628 with an issue of shares.

5. Some general ledger accounts have been provided by Nocturnes Ltd; refer to the following pages.

Required:

(i) Prepare a Statement of Cash Flows for Nocturnes Ltd, in accordance with NZ IAS 7 Statement of Cash Flows, for the year ended 31 March 2021. The reconciliation note, as per FRS-44 NZ, is required.

(ii) Assume Nocturnes Ltd classified dividends paid as a financial cash flow; calculate the net cash flow (used in)/from operating activities. Show your workings.

 
 

Transcribed Image Text:

31/3/2020 $2754 5 1524 7 2404 44 000< 13 5004 2004 7 992 3814 15 31/3/2021e $5004 4 991 7 0004 45 0254 16 000< Cashe Accounts receivable Inventory Plant and equipment - at cost Accumulated Depreciation Bank overdraft Accounts payable< GST payable«ª Interest expense payable Dividends payable Income tax payable Long-term borrowings Share capital Retained earnings 6 452 504 104 1504 40 30 4 000 3 000 11 8644 18 950< 9 7994 21 750< 60 0004 40 000< 14 980 Sales Cost of goods sold Operating expenses Interest expense<ª Depreciation expense Loss on sale of plant and equipment- Profit before tax Тах expensee 205 3 300- 5014 1 0144 4004 31/3/2020 $2754 5 1524 7 2404 44 000< 13 5004 2004 7 992 3814 15 31/3/2021e $5004 4 991 7 0004 45 0254 16 000< Cashe Accounts receivable Inventory Plant and equipment - at cost Accumulated Depreciation Bank overdraft Accounts payable< GST payable«ª Interest expense payable Dividends payable Income tax payable Long-term borrowings Share capital Retained earnings 6 452 504 104 1504 40 30 4 000 3 000 11 8644 18 950< 9 7994 21 750< 60 0004 40 000< 14 980 Sales Cost of goods sold Operating expenses Interest expense<ª Depreciation expense Loss on sale of plant and equipment- Profit before tax Тах expensee 205 3 300- 5014 1 0144 4004

Answer rating: 100% (QA)

Nocturned Limited Statement of Cash Flows Direct Method For the Year Ending December 31 2021 Particu... View the full answer