The following information relates to Paid Ltd, Balance sheet balances at 31 March 2013 31 March 2014
Question:
The following information relates to Paid Ltd,
Balance sheet balances at 31 March 2013 31 March 2014
$ $
Capital 205 000 182 500
Accumulated profits 18 500 7 000
Long term loan from BB Bank 20 000 25 000
Land & buildings @ cost 155 000 145 000
Machinery & equipment @
Carrying amount 79 500 74 500
Inventory 22 500 18 500
Debtors 31000 26 500
Bank 2 500 CR 1 500DR
Creditors 15 000 13 500
Current portion of long term
Loan 5 000 15 000
Income tax payable 4 500 6 500
Profit distribution payable 16 000 14 000
Accrued expenses- wages 3 500 2 500
Prepaid expenses-insurance 2 000 -
Additional
Depreciation on machinery and equipment to the amount of $13 500 was to taken into account.
During the year machinery and equipment with a carrying amount of $7 500 was sold for cash at a loss of $2 500
Land & buildings sold for cash during the year $15 000
All additions to property plant and equipment were paid
The provision for income tax for the year ended 31 March 2014 amounted $20 850
Profit for the year ended 31 March 2014 amounted to $18 000
According to the income statement of Paid Ltd for the year ended 31 March 2014 the cost of sales and gross profit amounted to $54 500 and $243 500 respectively. The interest expense on long term loan was shown as $4 250.
Required
a. Show the calculations for the cash receipts from customers if the amount is $291 500 for 2012
- b. Cash paid to suppliers and employees if the amount is $228 945 for 2012
- c. Prepare the cash flow statement using the direct method and the respective reconciliation of profit before taxation with cash generated from operations.
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen