A & L Mechanics is operated by Adrian and Len in partnership. Financial data for the partnership follow.

Additional information 1. All profits/losses are shared equally by Adrian and Len who also withdrew cash during the year. The vehicle that was sold had originally cost \($20\) 000 (second-hand) and had been depreciated down to $4000.
Required

(a) Prepare a statement of cash flows for the year ended 30 June 2025 using the direct method.

(b) Comment on the statement of cash flows with respect to the operating, investing and financing activities of A & L Mechanics.

Transcribed Image Text:

A & L MECHANICS Comparative statements of financial position as at 30 June Assets Cash Inventory Accounts receivable Prepaid insurance Long-term investments Motor vehicles Accumulated depreciation - motor vehicles Liabilities and equity Accounts payable Accrued sundry expenses Long-term loan Adrian: Capital Len: Capital Retained earnings Retained earnings Income Sales Gain from sale of motor vehicle Expenses Cost of sales General expenses (including depreciation) Profit A & L MECHANICS Statement of financial performance for the year ended 30 June 2025 2024 $ 32800 80 000 32 800 1200 28000 168000 2025 $ 38000 104 000 30 000 1400 40000 (52 000) $290 800 180000 (72 000) $321 400 $ 40.000 700 70000 40000 14 000 $ 28000 550 50000 60 000 80 000 46 100 $290 800 60 700 80 000 42150 $321 400 $900 000 2000 902 000 640000 136000 776 000 $126000