Land $ $ Question 16.4 The reconstruction of accounts (formulae) approach Selected financial statements of The Big Figure Ltd are shown below. THE BIG FIGURE LTD Statements of Financial Position as at 30 June 2017 2016 Assets Cash at bank 43 000 62 000 Accounts receivable 84 500 76 000 Inventory 113 500 124 000 25 000 Buildings 62 500 265 000 Accumulated depreciation - buildings 137 500 (100 000) (85000) Plant and equipment 40 000 Accumulated depreciation - plant and equipment 40 000 (10 000) Total assets (5000) 461 000 Liabilities 412000 Accounts payable 67 000 Interest payable 60 500 250 750 Provision for employee benefits 3 000 8 750 Long-term loan 66 250 45 000 Equity Share capital 125 000 Retained earnings 125 000 199 500 Total liabilities and equity 172 000 461 000 412 000 THE BIG FIGURE LTD Statement of Profit or Loss for the year ended 30 June 2017 Income Sales $ 443 500 Less: Expenses: Cost of sales 283 000 Employee expenses 98 000 Interest expense 5 000 Loss on the sale of land 6 250 Depreciation expense -buildings 15 000 Depreciation expense - plant and equipment 5 000 412 250 Profit for the year $ 31 250 Additional information (a) During the year ended 30 June 2017, cash dividends were paid to shareholders. (b) Building extensions were paid for during the year, and a block of land, costing $37 500 was sold for $31 250 cash. (C) No plant was purchased or sold during the year. Required A. Prepare the statement of cash flows of The Big Figure Ltd for the year ended 30 June 2017 based on the direct method of presentation. B. Show how cash flows from operating activities would be presented in the statement if the indirect method of presentation were used