18.23 Statement of cash flows for a company it LO6, 8 The comparative statements of financial position of Laguna Ltd as at 30 June 2019 and 2020, the statement of profit or loss and other comprehensive income and the statement of changes in equity for the year ended 30 June 2020 are shown below. Additional information 1. Other expenses include $27 000 depreciation expense on plant and insurance expense of $4000. 2. All sales and purchases of inventory are on credit. 3. Plant which had cost $30 000 and had a carrying amount of $17000 was sold for $26 000 cash. 4. Ignore taxes. Required (a) Prepare the statement of cash flows for Laguna Ltd for the year ended 30 June 2020 using the direct method. (b) Prepare the note reconciling cash flows from operating activities to profit. LAGUNA LTD Comparative Statements of Financial Position as at 30 June 2019 2020 ASSETS Cash at bank Accounts receivable Lease income receivable Inventory Prepaid insurance Property Plant Accumulated depreciation plant $ 6500 35 000 2 500 66 000 3500 90 000 300 000 (67000) $436 500 $ 23000 30 000 3500 82 000 2 500 40 000 360 000 (81 000) $460 000 LIABILITIES AND EQUITY Accounts payable 32 000 20 000 $436 500 $ 460 000 LIABILITIES AND EQUITY Accounts payable Interest payable Other expenses payable Mortgage payable Share capital General reserve Retained earnings 32 000 6 000 4500 120 000 125 000 20 000 5 000 5000 125 000 170 000 25 000 110 000 $460 000 149 000 $436 500 LAGUNA LTD Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2020 Sales Less: Cost of sales GROSS PROFIT Add: Other income: Lease income $ 7500 Gain on the sale of plant 9000 $420 000 281 000 139 000 16 500 155 500 Less: Expenses: Interest expense Loss on the sale of property Other expenses PROFIT 11500 10 000 107 000 128 500 $ 27000 LAGUNA LTD Statement of Changes in Equity for the year ended 30 June 2020 Share capital $125 000 Other reserves Retained earnings $ 149 000 27 000 (41 000) Balance at 1/7/19 Total comprehensive income for the period Dividends Issue of share capital Transfer to general reserve Balance at 30/6/20 Total $274 000 27 000 (41 000) 45 000 45 000 $25 000 (25000) $ 110 000 $ 170 000 $25 000 $ 305 000