10. Issued 5% debentures for $1 400 000.RequiredA. Prepare the net cash flow used in investing activities section of the statement of cash flows usingthe classification shown in Illustrative Example A of IAS 7/AASB 107.B. Prepare the net cash used in financing activities section of the statement of cash flows using theclassification shown in Illustrative Example A of IAS 7/AASB 107.A.PORSCHET LTDCash Flow Statement (Extract)for the year ended 30 June 2017Cash flows from investing activities:Purchase of investments (7, 9)$ (780 000)Purchase of property, plant and equipment (2, 6)(1 020 000)Proceeds from sale of equipment (4)480 000Proceeds from sale of investments (8)186 000Interest received (8)12 000Net cash used in investing activities$(1 122 000)B.Cash flows from financing activities:Proceeds from issue of share capital (1)$1 000 000Proceeds from issue of debentures (10)1 400 000Repayments of long-term borrowings (3)(360 000)Dividends paid (5)(220 000)Net cash from financing activities$1 820 000Downloaded by Thao Phuong ([email protected])lOMoARcPSD|5036155
Week 11 Discussion Problems: Cash Flow StatementExercise 18.6Statement of cash flows for sole trader, direct methodKim Khan has been in business as a sole trader for the past 5 years. The comparative statements offinancial position for the years 2016 and 2017 and a summarised income statement for the yearended 30 June 2017 are shown below:KIM KHANComparative Statements of Financial Positionas at 30 June20162017CURRENT ASSETSCashAccounts receivableInventoryPrepaid insuranceNON-CURRENT ASSETSEquipmentAccumulated depreciation – equipmentLandMotor vehiclesAccumulated depreciation – motor vehicles—$ 4 2906 00030019 200(6 000)20 40014 550(5490)$ 5403 1506 60036025 500(7 500)24 00015 600(6300)TOTAL ASSETS5325061950CURRENT LIABILITIESBank overdraftAccounts payable3006 150—7 950NON-CURRENT LIABILITIESLong-term mortgage1410018900TOTAL LIABILITIES2055026850NET ASSETS$32700$35100EQUITYKim Khan, Capital$32700$35100TOTAL EQUITY$32700$35100KIM KHANIncome Statementfor the year ended 30 June 2017SalesLess: Cost of sales$16 8005100GROSS PROFITLess: Expenses (including depreciation)11 7008610PROFIT$ 3090Additional informationKim had contributed capital during the year for $6000 cash and had made cash withdrawals duringthe year. The bank overdraft was considered to be part of the entity’s everyday cash managementactivities.RequiredPrepare a statement of cash flows using the direct method for Kim Khan’s business for the year ended30 June 2017.Downloaded by Thao Phuong ([email protected])lOMoARcPSD|5036155
Week 11 Discussion Problems: Cash Flow StatementNote:This solution follows basically the layout of the cash flow statement in Illustrative Example Aof AASB 107. Further details may be shown for internal cash flow statements, e.g. details ofequipment purchased, land purchased, vehicles purchased.