Ryan is a trading business and has been in operation for many years. It has been passed down from one generation after another. Ryan has prepared its final accounts as shown below.

Other data given:

(i) The interest expenses were paid as they arose.

(ii) During the financial year Ryan sold land and building for $207,000 cash. The original cost was $200,000 and its accumulated depreciation prior to the disposal was $6,000.

(iii) Ryan sold office equipment for $16,000 cash. Its original cost $70,000 and its accumulated depreciation was $50,000.

(iv) On 2 July 2008, Ryan injected $120,000 cash into the business.

(a) Construct a detailed Cash Flow Statement of Ryan for the year ended 30 June 2009. (14 marks)

(b)Ryan could not understand the cash flow statement that you have prepared. Explain the cash flow statement for Ryan. (6 marks)

Balance Sheet as at 30 June: 2009 2008 Current assets $'000 $'000 $'000 $'000 Cash at bank 40 10 Accounts receivables 134 121 Inventory 214 180 Prepaid insurance 12 9 400 320 Non-current assets Land and building 1,400 1,600 Less: Accumulated depreciation (220) 1,180 (200) 1,400 Motor vehicle 80 (70) 80 Less: Accumulated depreciation 10 (60) 20 Office equipment 180 250 Less: Accumulated depreciation (40) 140 190 TOTAL ASSETS 60) 1,730 1,930 Current liabilities Salary payable Accounts payable 12 3 180 157 192 Non-current liabilities 160 Notes payable 160 TOTAL LIABILITIES 100 352 260 NET ASSETS 1,378 1,670 Owner's Equity Beginning capital 1800 Add: Net Loss 1,670 (412) (130) Add: Additional Capital 120 Ending capital 0 1,378 1,670Ryans : Income Statement for the year ended 30 June 2009 $'000 $'000 Sales 14,020 Less: Cost of goods sold (14,000) Gross profit 20 Add: Profit on disposal of land and building 13 33 Less: Expenses Interest expenses 16 Loss on disposal of motor vehicle 4 Depreciation expenses 66 Salary expense 308 Other expenses, including insurance expense 51 445 Net Loss (412)