Wk10 Answer-2.docx - Tutorial Week 10 ACCY200 Ex 17.12...

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Tutorial Week 10 ACCY200 Ex. 17.12 Required: Using your answer from the previous session on tutorial for cash flows from operating activities, complete and present the entire Cash Flow Statement for the year-end 30 June 2022 A summarised comparative statement of financial position of Danica Ltd is presented below, together with the statement of profit or loss and other comprehensive income for the year ended 30 June 2022.
Interest (6 000) Profit before tax 75 000 Income tax expense (23 000) Profit for the year 52 000 Other comprehensive income Gain on revaluation of investments (net of tax) 3 500 Total comprehensive income $ 55 500 Additional information There were no disposals of investments or plant during the year. A dividend of $23 000 was paid during the year. The deferred tax liability is in relation to investments. Required Using the direct method of presenting cash flows from operating activities, prepare a statement of cash flows in accordance with AASB 107/IAS 7 for the year ended 30 June 2022.
ANSWER: 2021 2022 Increase (decrease) $ $ $ Cash 30 000 68 000 38 000 Trade receivables 46 000 70 000 24 000 Inventory 30 000 32 000 2 000 Investments 35 000 40 000 5 000 Plant 125 000 150 000 25 000 Accumulated depreciation (23 000) (35 000) 12 000 243 000 325 000 Accounts payable 39 000 43 000 4 000 Accrued interest 3 000 5 000 2 000 Current tax payable 10 000 12 000 2 000 Deferred tax liability - 1 500 1 500 Borrowings 60 000 100 000 40 000 Share capital 100 000 100 000 - Retained earnings 31 000 60 000 29 000 Investment revaluation reserve - 3 500 3 500 243 000 325 000 Receipts from customers Sales 700 000 Increase in receivables (24 000) Cash received from customers 676 000 Payments to suppliers and employees Cost of sales 483 000 Other expenses: Distribution costs 62 000 Administration costs 74 000 Depreciation expense (12 000 ) 124 000 Increase in inventory 2 000 Increase in accounts payable (4 000) Cash paid to suppliers and employees 605 000 Interest paid Interest expense 6 000 Increase in accrued interest (2 000) Interest paid 4 000 Income tax paid Income tax expense 23 000 Increase in tax payable (2 000) Income tax paid 21 000 Investments Revaluation gain net of tax 3 500
Increase in deferred tax liability 1 500 Purchase of investments - Increase in investments 5 000 Explanations: The increase in deferred tax liability is the tax effect of the revaluation increment, as per the additional information. As the increase in investments can be explained by the revaluation, and there were no disposals of investments, we can conclude that there were no purchases of investments during the year. The purchases of plant are determined as the increase in plant in the absence of any disposals of plant during the year. DANICA LTD Statement of cash flows for the year ended 30 June 2022 Cash flows from operating activities $ Receipts from customers 676 000 Payments to suppliers and employees (605 000) Cash generated from operations 71 000 Interest paid (4 000) Income tax paid (21 000) Net cash from operating activities 46 000 Cash flows from investing activities Cash paid for plant (25 000) Net cash used in investing activities (25 000) Cash flows from financing activities Proceeds from borrowings 40 000 Dividend paid (23 000) Net cash from financing activities 17 000 Net increase in cash and cash equivalents 38 000 Cash and cash equivalents at beginning of year 30 000 Cash and cash equivalents at end of year 68 000

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