The following information relates to Paid Ltd,

Balance sheet balances at           31 March 2013        31 March 2014

                                                  $                            $

Capital                                        205 000                  182 500

Accumulated profits                     18 500                    7 000

Long  term loan from BB Bank     20 000                    25 000

Land & buildings @ cost              155 000                  145 000

Machinery & equipment @

Carrying amount                         79 500                    74 500

Inventory                                    22 500                    18 500

Debtors                                      31000                     26 500

Bank                                           2 500 CR                1 500DR

Creditors                                     15 000                    13 500

Current portion of long term

Loan                                           5 000                      15 000

Income tax payable                     4 500                      6 500

Profit distribution payable             16 000                    14 000

Accrued expenses- wages           3 500                      2 500

Prepaid expenses-insurance        2 000                      -

 

Additional

Depreciation on machinery and equipment to the amount of $13 500 was to taken into account.

During the year machinery and equipment with a carrying amount of $7 500 was sold for cash at a loss of $2 500

Land & buildings sold for cash during the year $15 000

All additions to property plant and equipment were paid

The provision for income tax for the year ended 31 March 2014 amounted          $20 850

Profit for the year ended 31 March 2014 amounted to $18 000

According to the income statement of Paid Ltd  for the year ended 31 March 2014 the cost of sales and gross profit amounted to  $54 500 and $243 500 respectively. The interest expense on long term loan was shown as $4 250.

 

Required

a. Show the calculations for the cash receipts from customers if the amount is $291 500 for 2012

1. b. Cash paid to suppliers and employees if the amount is $228 945 for 2012
2. 
   
3. c. Prepare the cash flow statement using the direct method and the respective reconciliation of profit before taxation with cash generated from operations.

Answer rating: 100% (QA)

Ans a Calculation for cash receipts from customers if the amount is 291500 for 2012 Opening balance of Debtors 31000 Closing balance of Debtors 26500 Cash receipts from customers for 2012 291500 There... View the full answer