Vittoria Ltd requires a Statement of Cash Flows to be prepared for the year ended

31 March 2018, the following information has been collected for this purpose.

Vittoria Ltd Balance Sheets as at 31 March
	2017	2018
Cash	$176 000	$239 000
Accounts receivable	220 000	280 000
Allowance for doubtful debts	(30 000)	(40 000)
Inventory	90 000	100 000
Plant and equipment	900 000	1 074 000
Accumulated depreciation	(80 000)	(100 000)
Total assets	$1 276 000	$1 553 000
Accounts payable	80 000	70 000
Interest payable	1 000	2 000
Income tax payable	76 000	88 000
Long term loans	109 000	148 000
Share capital	400 000	500 000
Asset revaluation surplus	-	30 000
Retained earnings	610 000	715 000
Total equity and liabilities	$1 276 000	$1 553 000

Vittoria Ltd SCI for the year ended 31 March 2018:
Sales	$885 000
Less expenses:
COGS	240 000
Depreciation expense	90 000
Interest expense	6 000
Doubtful debts expense	40 000
Salaries and wages expense	200 000
Income tax expense	84 000
Other expenses	120 000
Profit after tax	105 000
OCI: Revaluation gain	30 000
TCI	$135 000

Question 2 continued:

Additional information:

Vittoria Ltd classifies interest expense and dividends paid as cash outflows from financing activities.

Plant and equipment, with a fair value of $100 000, has been acquired by the issue of

$100 000 worth of fully paid Vittoria Ltd shares to the sellers of the plant and equipment.

During the year, equipment that originally cost $100 000 was sold for $30 000 cash.

Plant and equipment was revalued upwards by $30 000.

A long-term loan of $30 000 was specifically organised for the purchase of plant and equipment costing $30 000.

Required:

(i) Prepare the general ledger accounts as required in the answer booklet.

(ii) Prepare a statement of cash flows for Vittoria Ltd, for the year ended 31 March 2018, in accordance with NZ IAS 7 Statement of Cash Flows. Vittoria Ltd uses the indirectmethod for the cash flows from operating activities (CFOA) section.

(iii) Prepare a statement of cash flows for Vittoria Ltd, for the year ended 31 March 2018, in accordance with NZ IAS 7 Statement of Cash Flows. Vittoria Ltd uses the directmethod for the cash flows from operating activities (CFOA) section. Complete the necessary reconciliation, as required by NZ FRS-44, to be included in the notes.

(iv) Explain, by completing the table in the answer booklet, how your answers to (ii) and (iii) above would changeifVittoria Ltd classified interest expense paid as a cash outflow from operating activities.

(v) Vittoria Ltd has provided you with 15 types of cash inflows and cash outflows in the answer booklet and requires you to determine where they should be included in the Statement of Cash Flows in accordance with NZ IAS 7 Statement of Cash Flows. AssumeVittoria Ltd uses the direct method for CFOA. Hint: Remember certain cash flows have a choice of classification; for these particular cash flows highlight the two choices available.

CFOA = cash flows from operating activities, CFIA = cash flows from investing activities and CFFA = cash flows from financing activities.