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Question 2 The following are the financial statements for the year ended 30 th June 2020. Sales (credit) 500,000 Cost of goods sold (300,00) Gross

Question 2

The following are the financial statements for the year ended 30th June 2020.

Sales (credit)

500,000

Cost of goods sold

(300,00)

Gross profit

200,000

Loss on sale of plant

5,000

Depreciation buildings

4,000

Depreciation plant and equipment

8,000

Bad and doubtful debts

2,600

Other administrative and selling expenses

140,000

(159,600)

Profit before tax

40,400

Tax expense

(10,000)

Profit after tax

30,400

Dividend Ordinary share

(20,750)

Retained profits

9,650

Earth Ltd

Balance Sheet as at 30 June

2020

2019

Current assets

Cash at bank

55,500

34,500

Accounts receivable

228,000

131,000

Provision for doubtful debts

(8,000)

(6,000)

Inventory

55,000

83,000

Non-current assets

Land

80,000

45,000

Buildings

136,000

112,000

Acc. Depreciation - Buildings

(28,000)

(24,000)

Plant and equipment

114,000

100,000

Acc. Depreciation Plant and equipment

(64,000)

(64,000)

568,500

411,500

Current liabilities

Accounts payables

112,600

118,000

Accrued expenses: Other administrative expenses

19,000

12,000

Dividend payable

5,250

6,500

Tax payable

3,000

1,000

Non-current liabilities

Debenture

120,000

100,000

Shareholders equity

Ordinary shares

225,000

120,000

Asset revaluation reserve

20,000

0

Retained earnings

63,650

54,000

568,500

411,500

Notes:

1. A piece of existing land has been revalued upwards. Two pieces of land were acquired during the year. There was no disposal of land during the year.

2. Plant and equipment costing $33,000 was sold.

3. No buildings were sold during the year.

Required:

Prepare a cash flow statement for the year ended 30 June 2020 as per AASB107 (show all workings).

(12 marks)

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