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Assignment on Cash Flow Statement

   

Added on  2020-05-03

8 Pages1589 Words41 Views
WEEK 13 TUTORIAL QUESTIONSCASH FLOW STATEMENT IIBASED ON LECTURE 12Due Date: Week 13 (GP - Wed, 25/10/17; CAB – Thu, 26/10/17)PRACTICAL QUESTION(18 marks)Fast Feet Couriers Limited’s Balance Sheets as at 30 June 2016 and 2017 were as follows:Fast Feet Couriers Limited’s Balance Sheet as at 30 June20172016ASSETS$$Current AssetsCashAccounts Receivable140,000260,000Provision for Doubtful Debts(21,000)(20,000)Inventory420,000240,000Prepaid Insurance3,0004,000542,000484,000Non-Current AssetsLand230,000230,000Buildings200,000200,000Accumulated Depreciation – Buildings(75,000)(50,000)Plant & Equipment300,000280,000Accumulated Depreciation – Plant & Equipment(70,000)(45,000)585,000615,000TOTAL ASSETS1,127,0001,099,000LIABILITIES AND OWNERS’ EQUITYLiabilitiesBank Overdraft140,000176,000Accounts Payable260,000260,000Accrued Wages (Wages Payable)60,00040,000Provisions – Other Operating Expenses020,000Current Tax Payable7,5003,000Zero-coupon debenture (Non-Interest Bearing Loan)229,500200,000697,000699,000Owners’ EquityShare Capital90,00060,000Asset Revaluation Reserve20,0000General Reserve60,00090,000Retained Profits260,000250,000Total Equity430,000400,000TOTAL LIABILITIES AND OWNERS’ EQUITY1,127,0001,099,0001

The company’s Income Statements for the year ended 30June 2017 and general ledgerrevealed the following information: Fast Feet Couriers Limited’s Income Statementfor the year ended 30 June 2017$$RevenueNet Sales300,000Cost of Goods Sold160,000Gross Profit140000Other incomeInterest20,000Gain on Sale of Equipment 20000(Carrying Amount: $50,000)180,000ExpensesWages Expense60,000Other operating expenses40,000Depreciation Expense - Buildings25,000Depreciation Expense - Plant & Equipment35,000Doubtful Debt Expense2,000Insurance Expense1,800163,800Net Profit Before Tax16,200Income Tax Expense9,000Net Profit After Tax7,200Additional Information:Fast Feet Couriers classifies interest as operating cash flow.Fast Feet Couriers issued $10,000 in bonus shares.The company measures its plant & equipment at fair value. 2

Required:Using the direct method, complete the schedule below. Use the results from last week tocomplete the Operating Cash Flow section. You are now required to prepare the entire CashFlow Statement for the year ended 30 June 2017 in accordance with AASB 107. You mayuse the reconstruction of the T-accounts or formula method or both. Show all workings. FAST FOOT COURIERS LIMITEDCash Flow Statement for the year ended 30 June 2017$$Cash flows from operating activitiesCash receipts from customers $ 420,000.00 Cash paid to suppliers & employees $ (380,000.00)Cash used in operations $ (40,800.00)Interest income $ 20,000.00 Income taxes paid $ (4,500.00)Net cash used in operating activities $ 14,700.00 Cash flows from investing activitiesPurchase of Plant and equipment $ (70,000.00)Add: Sale of Plant and Equipment $ 60,000.00 Net cash used in investing activities $ (10,000.00)Cash flows from financing activitiesIssue of share capital $ 20,000.00 Issue of Zero-coupon debenture $ 29,500.00 Net cash from financing activities $ 49,500.00 Net increase in cash and cash equivalents $ 54,200.00 Cash and cash equivalents at beginning of period $ (176,000.00)3

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