Question
You have been provided with the following extracts of the financial statements of Provision Ltd for the year ended 31 December 2018. Statement of financial
You have been provided with the following extracts of the financial statements of Provision Ltd for the year ended 31 December 2018.
Statement of financial position for the year ended 31 December 2018
Note | 2018 | 2017 | |
Non-current assets | 1 | $ 328,000 | $ 286,000 |
Current assets | $ 170,000 | $ 170,000 | |
Inventories | $ 90,000 | $ 110,000 | |
Trade receivables | $ 62,000 | $ 55,000 | |
Cash | $ 18,000 | $ 5,000 | |
Total assets | $ 498,000 | $ 456,000 | |
Equity and Liabilities | |||
Shareholders equity and reserves | $ 418,000 | $ 290,000 | |
Contributed equity (ordinary shares) | $ 170,000 | $ 110,000 | |
Retained income | $ 198,000 | $ 130,000 | |
Preference shares - | $ 50,000 | $ 50,000 | |
Non-current liabilities | |||
Loan | - | $ 100,000 | |
Current liabilities | $ 80,000 | $ 66,000 | |
Trade payables | $ 48,000 | $ 44,000 | |
Dividends payable | $ 12,000 | $ 10,000 | |
Inland Revenue | $ 20,000 | $ 12,000 | |
Total equity and liabilities | $ 498,000 | $ 456,000 |
Extract from the statement of profit and loss for the year ended 31 December 2018:
Gross revenue | $ 375,000 | ||
Cost of sales | $ 217,000 | ||
Net profit before taxation | $ 158,000 | ||
Taxation | $ 73,000 | ||
Net profit for the year | $ 85,000 |
Statement of changes in equity for the year ended 31 December 2018
Ordinary shares | Preference shares | Retained income | Total | |
Balance 31 December 2017 | $ 110,000 | $ 50,000 | $ 130,000 | $ 290,000 |
Changes in equity for 2018: | ||||
Net profit for the year | $ 85,000 | $ 85,000 | ||
Dividends paid | -$ 7,000 | -$ 7,000 | ||
Preference dividends | -$ 10,000 | -$ 10,000 | ||
New share issue | $ 60,000 | |||
Balance 31 December 2018 | $ 170,000 | $ 50,000 | $ 198,000 | $ 418,000 |
Additional information:
1. Non-current assets
Cost | Accumulated depreciation | Carrying value | ||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |
Land and buildings | $ 180,000 | $ 140,000 | - | - | $ 180,000 | $ 140,000 |
Plant and machinery | $ 218,000 | $ 190,000 | $ 70,000 | $ 44,000 | $ 148,000 | $ 146,000 |
$ 398,000 | $ 330,000 | $ 70,000 | $ 44,000 | $ 328,000 | $ 286,000 |
- A small land area costing $ 25 000 was sold for a profit of $ 8 000 on 30 March 2018.
- Plant and machinery costing $ 40 000 was acquired.
- Plant and machinery with a book value of $ 8 000 was sold at a loss of $ 4 000.
- During the year, 60 000 ordinary shares were issued at $ 1 per share.
- Interest paid amounted to $ 5 000 and investment income was $ 2 000.
REQUIRED:
Prepare the statement of cash flow for Provision Ltd for the year ended 31 December 2018 using the indirect method.
*Kindly can you please show me the working*
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started