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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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