Question 3: Statement of cash flows (8 marks)

You are the accountant for Fun Times Ltd, an Australian trampoline wholesaler. A summary of assets, liabilities and equity of Fun Times Ltd is presented below, together with details of revenue, expenses and profit for the year ended 30 June 2024:

Assets, liabilities and equity as at 30 June 2024
	2024	2023
	$	$
Assets
Cash	128,000	-
Accounts receivable	430,000	300,000
Provision for doubtful debts	(60,000)	(40,000)
Interest receivable	2,000	-
Plant	780,000	500,000
Accumulated depreciation plant	(180,000)	(100,000)
Inventory	220,000	160,000
Liabilities
Bank overdraft	-	20,000
Accounts payable	270,000	192,000
Accrued wages	10,000	8,000
Provision for annual leave	50,000	30,000
Loans	150,000	-
Equity
Share capital	250,000	100,000
Revaluation surplus	40,000	40,000
Retained earnings	550,000	430,000

Revenue, expenses and profit for the year ended 30 June 2024
	2024
	$
Revenue:
Sales revenue	1,600,000
Interest	20,000
Gain on disposal of plant	30,000
Expenses:
Cost of goods sold	(500,000)
Doubtful debts	(30,000)
Depreciation plant	(100,000)
Wages	(260,000)
Annual leave	(30,000)
Interest	(8,000)
Rent	(40,000)
Net profit for the year	682,000

Additional information:

• The following expenses are paid as incurred: rent and interest.
• Accruals of wages are made before payment.
• The carrying amount of plant sold during the year was $100,000.
• The accounts payable account is used for inventory purchases.
• The bank overdraft is payable on demand and forms part of cash equivalents.
• Fun Times Ltd classifies interest received as cash flows from investing activities, and interest paid as an operating activity.

Required:

Prepare a statement of cash flows in accordance with AASB 107 for the year ended 30 June 2024, using the direct method. Show all relevant workings. Comparative figures and notes are not required. Note: you are not required to consider or account for income tax.