Question 18: Statement of cash flow (20 Marks) Additional information Island Ltd is preparing a statement of cash flows for the year ended 30 June 2019. The data are provided as below. (a) A dividend was paid during the year. (b) A vehicle that had carrying amount S2 400 was sold for cash of S3 000; a new vehicle was bought during the year. (c) Some new office furniture was bought. (d) New shares were issued during the year. (e) Ignore income tax effects (i.e. assume the tax rate is 0%). ISLAND LTD Statements of Financial Position as at 30 June 2019 2019 2018 S S 800 46 400 700 33700 S 127 400 (11 400) S 102 960 (6 960) Required: A. Prepare the statement of cash flows based on the direct method of presentation for the year ended 30 June 2019. (15 marks) B. Prepare a reconciliation of the profit for the year with net cash flows from operating activities. (5 marks) 116 000 70 800 96 000 74 600 37 600 32 000 Assets Petty cash Cash at bank Accounts receivable Allowance for doubtful debts Inventory Motor vehicles Acc. depn-motor vehicles Office furniture Acc. depn-office furniture Total assets Liabilities Accounts payable Equity Share capital Retained earnings Total liabilities and equity 50 400 (12 800) 18 400 (8400) 42 000 (10 000) 16 000 (7 600) 10 000 281 600 8400 $ 245 400 S S 47 200 s 45 000 196 000 38 400 281 600 165 000 35 400 $ 245 400 S 750 000 3000 753 000 ISLAND LTD Statement of Profit or Loss for the year ended 30 June 2019 Income Sales revenue S Proceeds from sale of vehicle Less: Expenses Cost of sales Salaries and wages Doubtful debts expenses Depreciation - motor vehicles Depreciation office equipment Carrying amount of vehicle sold Profit before tax Less: Income tax expense Profit after tax 603 000 116 360 14 440 6000 800 2 400 743 000 10 000 S 10 000