Question
Shown below is an extract from the comparative statements of financial position and statement of profit or loss of Ariana Ltd year ended 30 June
Shown below is an extract from the comparative statements of financial position and statement of profit or loss of Ariana Ltd year ended 30 June 2022:
Ariana LTD
Statement of Financial Position as at 30 June
30 June 2022 | 30 June 2021 | |
Current Assets | ||
Cash | 21,700 | 8,000 |
Accounts Receivable | 27,000 | 26,500 |
Allowance for Doubtful Debts | (700) | (400) |
Inventories | 56,000 | 46,000 |
104,000 | 80,000 | |
NON-CURRENT ASSETS |
| |
Land and Buildings - at cost | 192,500 | 242,500 |
Accumulated depreciation- buildings | (50,500) | (46,000) |
Equipment - at cost | 93,000 | 40,000 |
Accumulated depreciation- equipment | (19,000) | (15,000) |
| 216,000 | 221,500 |
TOTAL ASSETS | 320,000 | 301,500 |
CURRENT LIABILITIES |
| |
Accounts payable | 45,000 | 46,500 |
Accrued Expenses | 3,500 | 1,900 |
Interest Payable | 2,500 | 3,600 |
Current tax liability | 8,000 | 6,000 |
| 59,000 | 58,000 |
NON- CURRENT LIABILITIES |
| |
Bank Loan (Secured) | 103,000 | 118,000 |
| 103,000 | 118,000 |
TOTAL LIABILITIES | 162,000 | 176,000 |
|
| |
Share Capital | 98,000 | 78,000 |
Retained Earnings | 60,000 | 47,500 |
TOTAL EQUITY | 158,000 | 125,500 |
TOTAL EQUITY AND LIABILITIES | 320,000 | 301,500 |
Ariana LTD
Statement of Profit or Loss
for the year ended 30 June 2022
Income | ||
Sales | 593,500 | |
Gain on sale of land | 9,000 | |
Total Income | 602,500 | |
Less: Expenses | ||
Cost of Sales | 420,000 |
|
Depreciation Expense - equipment | 4,000 |
|
Depreciation Expense - buildings | 4,500 |
|
Interest Expense | 3,800 |
|
Bad Debts Expense | 1,550 |
|
Employee and Other Expenses | 110,000 | 543,850 |
Profit before Tax | 58,650 | |
Income Tax Expense | (17,500) | |
Profit for the year | 41,150 |
Additional Information:
1. Land with a cost of $50,000 was sold for cash for $59,000
2. Equipment of $53,000 was purchased during the year.
3. 10,000 shares were issued during the year for $2 each.
4. Cash dividends were paid during the year.
5. A bank loan of $15,000 was repaid during the year.
Required:
Prepare the statement of cash flows for Ariana Ltd for the year ended 30 June 2022 using the direct method as required by AASB 107 (you are required to show the relevant T-account reconstructions). (15 Marks)
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