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Shown below is an extract from the comparative statements of financial position and statement of profit or loss of Opal Ltd for the year ended

Shown below is an extract from the comparative statements of financial position and statement of profit or loss of Opal Ltd for the year ended 30 June 2021:

Opal Ltd

Balance Sheet

as at 30 June

2021

2020

$000

$000

Cash at bank

55

30

Trade receivables

245

218

Allowance for doubtful debts

(45)

(42)

Inventories

445

480

CURRENT ASSETS

700

686

Plant & equipment at cost

520

480

Accum depreciation plant & equip.

(105)

(80)

NON-CURRENT ASSETS

415

400

TOTAL ASSETS

1,115

1,086

Accounts payable

289

322

Accrued Expenses

20

45

Interest payable

10

6

Current tax liability

32

35

CURRENT LIABILITIES

351

408

Mortgage

400

330

NON-CURRENT LIABILITIES

400

330

TOTAL LIABILITIES

751

738

NET ASSETS

364

348

Share capital

200

200

Retained earnings

164

148

TOTAL EQUITY

364

348

Opal Ltd

Income Statement

for the year ended 30 June 2021

Revenue

$000

Sales (all sales are credit sales)

350

Total income

350

Less:

Cost of Goods sold

140

Other expenses

20

Doubtful debts expense

10

Interest expense

23

Depreciation Plant & Equipment

25

Total expenses

218

Profit before tax

132

Less: Income Tax Expense

40

PROFIT AFTER TAX

92

Additional information:

a) New plant and equipment was purchased in cash during the year. No plant or equipment was sold during the year.

b) There are no cash sales during the year.

c) The company pays tax once only before the end of financial year.

d) The income tax rate is 30%.

Required:

1. Prepare the statement of cash flows for Opal Ltd for the year ended 30 June 2021 using the direct method as required by AASB 107. (11 Marks)

2. Prepare a reconciliation of net cash flows arising from operating activities with profit. (4 marks)

FORMATTING

CASHFLOWS FROM OPERATING ACTIVITIES
Cash received from Customers
Cash paid to Suppliers, Employees and Others
Cash generated from operations
Interest Paid
Income Tax Paid
Cash Flows from Operating Activities
CASHFLOWS FROM INVESTING ACTIVITIES
Cash Flows from Investing Activities
CASHFLOWS FROM FINANCING ACTIVITIES
Cash Flows from Financing Activities
Net Increase/Decrease in Cash
Opening Balance of Cash and Cash Equivalents
Closing Balance of Cash and Cash Equivalents

Reconciliation between Profit and Cashflows from Operating Activities

_______________________

Accounts Receivable ( if needed)

Allowance for Doubtful Debts( if needed)

Inventory( if needed)

Accounts Payable( if needed)

Interest Payable( if needed)

Current Tax Liability( if needed)

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