10 issued 5 debentures for 1 400 000 required a

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10. Issued 5% debentures for $1 400 000. Required A. Prepare the net cash flow used in investing activities section of the statement of cash flows using the classification shown in Illustrative Example A of IAS 7/AASB 107. B. Prepare the net cash used in financing activities section of the statement of cash flows using the classification shown in Illustrative Example A of IAS 7/AASB 107. A. PORSCHET LTD Cash Flow Statement (Extract) for the year ended 30 June 2017 Cash flows from investing activities: Purchase of investments (7, 9) $ (780 000) Purchase of property, plant and equipment (2, 6) (1 020 000) Proceeds from sale of equipment (4) 480 000 Proceeds from sale of investments (8) 186 000 Interest received (8) 12 000 Net cash used in investing activities $(1 122 000) B. Cash flows from financing activities: Proceeds from issue of share capital (1) $1 000 000 Proceeds from issue of debentures (10) 1 400 000 Repayments of long-term borrowings (3) (360 000) Dividends paid (5) (220 000) Net cash from financing activities $1 820 000 Downloaded by Thao Phuong ([email protected]) lOMoARcPSD|5036155
Week 11 Discussion Problems: Cash Flow Statement Exercise 18.6 Statement of cash flows for sole trader, direct method Kim Khan has been in business as a sole trader for the past 5 years. The comparative statements of financial position for the years 2016 and 2017 and a summarised income statement for the year ended 30 June 2017 are shown below: KIM KHAN Comparative Statements of Financial Position as at 30 June 2016 2017 CURRENT ASSETS Cash Accounts receivable Inventory Prepaid insurance NON-CURRENT ASSETS Equipment Accumulated depreciation – equipment Land Motor vehicles Accumulated depreciation – motor vehicles $ 4 29 0 6 000 300 19 200 (6 000) 20 400 14 550 (5 490 ) $ 540 3 150 6 600 360 25 500 (7 500) 24 000 15 600 (6 300 ) TOTAL ASSETS 53 250 61 950 CURRENT LIABILITIES Bank overdraft Accounts payable 300 6 150 7 950 NON-CURRENT LIABILITIES Long-term mortgage 14 100 18 900 TOTAL LIABILITIES 20 550 26 850 NET ASSETS $32 700 $35 100 EQUITY Kim Khan, Capital $32 700 $35 100 TOTAL EQUITY $32 700 $35 100 KIM KHAN Income Statement for the year ended 30 June 2017 Sales Less: Cost of sales $16 800 5 100 GROSS PROFIT Less: Expenses (including depreciation) 11 700 8 610 PROFIT $ 3 090 Additional information Kim had contributed capital during the year for $6000 cash and had made cash withdrawals during the year. The bank overdraft was considered to be part of the entity’s everyday cash management activities. Required Prepare a statement of cash flows using the direct method for Kim Khan’s business for the year ended 30 June 2017. Downloaded by Thao Phuong ([email protected]) lOMoARcPSD|5036155
Week 11 Discussion Problems: Cash Flow Statement Note: This solution follows basically the layout of the cash flow statement in Illustrative Example A of AASB 107. Further details may be shown for internal cash flow statements, e.g. details of equipment purchased, land purchased, vehicles purchased.

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