Kim Khan has been in business as a sole trader for the past 5 years. The comparative
Question:
Kim Khan has been in business as a sole trader for the past 5 years. The comparative statements of financial positions for the years 2016 and 2017 and a summarized income statement for the year ended june 2020 are shown below.
Kim Khan
comparative statements of financial positions
as of 30 June
2019 2020
CURENT ASSETS
cash - $ 540
Accounts receivable $4290 3150
Inventory 6000 6600
Prepaid insurance 300 360
NON- CURRENT ASSETS
Equipment 19200 25500
accumulated depreciation- equipment (6000) (7500)
Land 20400 24000
Motor vehicles 14550 15600
Accumulated depreciation- motor vehicles (5490) (6300)
TOTAL ASSETS 53250 61950
CURRENT LIABILITIES
Bank overdraft 300 -
accounts payable 6150 7950
NON-CURRENT LIABILITIES
Long-term mortgage 14100 18900
TOTAL LIABILITIES = 20550 26850
NET ASSETS
EQUITY
kim khan, capital 32700 35100
TOTAL EQUITY $32700 $35100
KIM KHAN
Income Statement
for the year ended 30 June 2020
Sales $16800
less: Cost of Sales 5100
GROSS PROFIT 11700
Less: Expenses ( including depreciation) 8610
PROFIT $ 3090
Additional information
- Kim had contributed capital during the year for $6000 cash and had made cash withdrawals during the year. The bank overdraft was considered to be part of the entity's everyday cash management activities.
Required
(a) Prepare a statement of cash flows using the direct method for Kim Khan's business for the year ended 30 June 2020. (LO5)