Question1

The following statement of financial position relates to XYZ Ltd for the years ending 30 June 2019 and 30 June 2020.

XYZ Ltd

Statement of Financial Position

As at 30 June

2020

2019

Cash at Bank

$43,000

$42,000

Accounts Receivable

34,500

96,000

Inventory

113,500

124,000

Land

45,000

62,500

Buildings

265,000

137,500

Accumulated depreciation - Buildings

(100,000)

(85,000)

Plant & Equipment

40,000

40,000

Accumulated depreciation - Plant & Equipment

(10,000)

(5,000)

431,000

412,000

Accounts Payable

67,000

60,500

Interest Payable

250

750

Accrued Employee Expenses

3,000

8,750

Mortgage loan payable

66,250

45,000

Share Capital

125,000

125,000

Asset Revaluation Reserve - Land

20,000

Retained earnings

149,500

172,000

431,000

412,000

Additional Information:

a)Gross profit for the year ended 30 June 2020 was $110,500, and consisted of:

Sales Revenue$393,500

Cost of Sales283,000

b)All purchases and sales of inventory were on credit.

c)Loss for the year ended 30 June 2020 was $18,750, after deducting expenses of $129,250 from the gross profit figure.

d)Expenses of $129,250 comprise of depreciation on Buildings and on Plant & Equipment, a loss on sale of land, $5,000 in interest expense, and other expenses (other expenses relate to Accrued Employee Expenses in the statement of financial position).

e)During the year ended 30 June 2020, cash dividends were paid.

f)The increase in Buildings was due to building extensions which were paid for during the year, and a block of land costing $37,500 was sold for $31,250 cash.

g)No Plant & Equipment was purchased or sold during the year.

h)The revaluation increment on land of $20,000 does not have any effect on profit or loss.

Required:

Prepare the statement of cash flows of XYZ Ltd for the year ended 30 June 2020 based on the direct method of presentation. Ignore tax effects. Notes are not required.

(Total = 16 marks)

Your answers:

Provide your answers from here

XYZ LTD

Statement of Cash Flows

for the year ended 30 June 2020

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Workings:

Provide your workings from here. Please use the blank T-account format (if necessary).