The Comparative Balance Sheet of Wilson Ltd as at 30 June 2020 and 2021 are presented below,
Question:
The Comparative Balance Sheet of Wilson Ltd as at 30 June 2020 and 2021 are presented below, together with the Income Statement for the Year Ended 30 June 2021. Additional information for the question is also provided below.
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Required:
Prepare the Statement of Cash Flows for Wilson Ltd for the year ended 30 June 2021 using the direct method.
Wilson Ltd Comparative Balance Sheet as at 30 June 2021 | |||
Assets | 2020 | 2021 | |
Cash | $ 31 200 | $ 55 200 | |
Accounts receivable | 79 200 | 57 600 | |
Inventory | 64 800 | 48 000 | |
Prepaid expenses | 31 200 | 48 000 | |
Land | 96 000 | 96 000 | |
Property, plant and equipment | 540 000 | 480 000 | |
Less: Accumulated depreciation | (162 000) | (120 000) | |
Total assets | $680 400 | $664 800 | |
Liabilities and Shareholders' Equity | |||
Accounts payable | $ 44 400 | $ 21 600 | |
Accrued expenses payable | 18 000 | 22 800 | |
Interest payable | 3 600 | 2 400 | |
Income taxes payable | 4 800 | 7 200 | |
Bonds payable | 192 000 | 120 000 | |
Share capital | 252 000 | 295 200 | |
Retained earnings | 165 600 | 195 600 | |
Total liabilities and shareholders' equity | $680 400 | $664 800 |
Wilson Ltd Income Statement For the Year Ended 30 June 2021 | ||
Income | ||
Sales revenue | $1 440 000 | |
Gain on sale of PPE assets | 6 000 | $1 446 000 |
Less: Expenses | ||
Cost of goods sold | 1 200 000 | |
Other expenses | 162 000 | |
Interest expense | 12 000 | |
Income tax expense | 21 600 | 1 395 600 |
Net profit | $ 50 400 |
Additional information:
1.Property Plant and Equipment assets were sold at a sales price of $150 000.
2.Additional equipment was purchased at a cost of $144 000.
3.The other expense category includes depreciation.
4.All sales and purchases of inventory were on credit.