Question 1.

The Comparative Balance Sheet of Wilson Ltd as at 30 June 2023 and 2024 are presented below, together with the Income Statement for the Year Ended 30 June 2024. Additional information for the question is also provided below.

Required: Prepare the statement of cash flows for Wilson Ltd for the year ended 30 June 2024 using the direct method. Show all workings.

Wilson Ltd Comparative balance sheet

as at 30 June 2024

Assets 2023 2024

Cash $ 31 200 $ 55 200

Accounts receivable 79 200 57 600

Inventory 64 800 48 000

Prepaid expenses 31 200 48 000

Land 96 000 96 000

Property, plant and equipment 540 000 480 000

Less: Accumulated depreciation (162 000) (120 000)

Total assets $680 400 $664 800

Liabilities and Shareholders' Equity

Accounts payable $ 44 400 $ 21 600

Accrued expenses payable 18 000 22 800

Interest payable 3 600 2 400

Income taxes payable 4 800 7 200

Bonds payable 192 000 120 000

Share capital 252 000 295 200

Retained earnings 165 600 195 600

Total liabilities and shareholders' equity $680 400 $664 800

Wilson Ltd Income Statement

For the Year Ended 30 June 2024

Income

Sales revenue $1 440 000

Gain on sale of PPE assets 6 000

$1 446 000

Less: Expenses

Cost of goods sold 1 200 000

Other expenses 162 000

Interest expense 12 000

Income tax expense 21 600

1 395 600

Net profit $ 50 400

Additional information:

1. Property Plant and Equipment assets were sold at a sales price of $150 000.

2. Additional equipment was purchased at a cost of $144 000.

3. The other expense category includes depreciation.

4. All sales and purchases of inventory were on credit.