Question
The financial statements of Nick Scali Ltd are presented as follows: Nick Scali Ltd Statement of Financial Position as at 31 Dec 2017 $ $
The financial statements of Nick Scali Ltd are presented as follows:
Nick Scali Ltd
Statement of Financial Position as at 31 Dec 2017
$
$
2016
2015
Assets
Cash
55 000
38 000
Accounts receivables
69 000
27 000
Inventory
55 000
----
Prepaid expensed
5 000
7 000
Land
46 000
71 000
Equipment
194 000
69 000
Accumulated depreciation - equipment
(29 000)
(11 000)
Total
395 000
201 000
Liabilities and equity
Accounts payable
24 000
41 000
Accrued expense payable
11 000
----
Convertible notes payable
111 000
151 000
Share capital
220 000
60 000
Retained earnings
206 000
136 000
Total
572 000
388 000
Nick Scali
Statement of Profit or Loss
for year ended 31 Dec 2017
$
$
Sales
885 000
Cost of sales
460 000
Operating Expense
220 000
Interest expense
15 000
695 000
Profit before tax
190 000
Income tax expense
70 000
Profit
120 000
Additional information:
Operating expenses include depreciation expense of $35 000.
Cash dividends of $55 000 were declared and paid in 2017.
Interest expense of $12 000 was paid in cash.
Land was sold at its carrying amount for cash in 2017.
During 2017, equipment with a cost of $170 000 was purchased for cash. Equipment with a cost of $40 000 and carrying amount of $35 000 was sold.
In 2017, convertible notes of $15 000 were redeemed at their carrying amount for cash; convertible notes of $30 000 were converted into ordinary shares issued at $30 000 in total.
Ordinary shares were issues for $120 000 in cash during 2017.
Required:
statement of cash flows using the direct method. Marks will be deducted if no workings are shown
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