Question
QUESTION 1: FALCON LTD The following is Income Statement of Falcon Ltd for the year ended 31 Dec 2021: 2021 '000 Revenue 15,650 Cost of
QUESTION 1: FALCON LTD
The following is Income Statement of Falcon Ltd for the year ended 31 Dec 2021:
2021
'000
Revenue
15,650
Cost of sales
(8,500)
Gross profit
7,150
Expenses
(1,200)
Interest expense
(42)
Profit before tax
5,908
Tax expense
(1,200)
Profit after tax
4,708
The following is the Statement of Financial Position of Falcon Ltd as at 31 Dec 2020 and 2021:
2020
2021
ASSETS
'000
'000
Non- current Assets
Land
2,650
2,670
Equipment Cost
2,000
2,620
Less: Accum.Depreciation
(400)
(770)
Net Book Value of Equipment
1,600
1,850
Current Assets
Inventories
1,350
1,400
Trade Receivables
200
156
Cash
120
5,479
Total Assets
5,920
11,555
EQUITIES AND LIABILITIES
Share Capital - 1 shares
3,000
3,500
Share Premium
1,500
1,750
Revaluation Reserve
200
220
Retained Earnings
170
4,740
Current Liabilities
Trade Payables
125
80
Tax Payable
900
1,200
Interest Payable
25
20
Non- current Liabilities
Debenture Loan
0 45
Total Equity and Liabilities
5,920
11,555
You are informed that:
a)Equipment which originally cost 300,000 was sold for cash of 350,000. Accumulated depreciation relating to the plant sold amounted to 50,000.The profit/loss on disposal is included in expenses in Income Statement.
b)The company issued 500,000 ordinary shares at a price of 1.5 each.
c)Dividend payment for the year was 138,000.
d)Increase in Land's value of 20,000 relates to its revaluation during this year.
Required:
Prepare the complete statement of cash flows for Falcon Ltd for the year ended 31 Dec 2021. Show supporting workings.
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