Question

In: Accounting

A summarised comparative statement of financial position of Gilbert Ltd is presented below, together with the...

  1. A summarised comparative statement of financial position of Gilbert Ltd is presented below, together with the statement of profit or loss for the year ended 30 June 2019.

    Gilbert Ltd

    Statements of Financial Position (extract)

    as at 30 June 2019

    2019

    2018

    $

    $

    Cash

    73 000

    60 000

    Trade receivables

    90 000

    80 000

    Allowance for doubtful debts

    (6 000)

    (3 000)

    Inventory

    50 000

    45 000

    Available for sale investments

    24 000

    17 000

    Plant

    110 000

    106 000

    Accumulated depreciation

    (53 000)

    (35 000)

    Total Assets

    288 000

    270 000

    Accounts payable

    45 000

    65 000

    Interest payable

    3 000

    5 000

    Borrowings

    80 000

    50 000

    Share capital

    100 000

    100 000

    Reserves

    10 000

    5 000

    Retained earnings

    50 000

    45 000

    Total liabilities and equity

    288 000

    270 000

    Gilbert Ltd

    Statement of Profit or Loss (extract)

    for the year ended 30 June 2019

    Sales (all on credit)

    Cost of sales

    Gross profit

    Doubtful debt expenses

    Wages

    Employee entitlements

    Depreciation expense

    Interest expense

    120 000

    (44 000)

    76 000

    (5 000)

    (6 000)

    (4 000)

    (48 000)

    (7 000)

    Additional information

    1. Plant extensions were paid for during the year ended 30 June 2019.
    2. Plant with a carrying value of $nil (cost of $30 000; accumulated depreciation of $30 000) is scrapped.
    3. Available-for-sale investments are measured at fair value, with increases/decreases being recognised in other comprehensive income, and accumulated in the investment revaluation reserve until investments are sold.
    4. Income tax of $3 000 was paid in cash during the year ended 30 June 2019.
    5. Wages and employee entitlements expenses were paid in cash.
    6. No cash dividends were paid during the year ended 30 June 2019.

    REQUIRED

    Prepare a cash flow statement for Gilbert Ltd for the year ending 30 June 2019 using the direct method. Notes are not required. Show all workings as marks are awarded for workings.   

Solutions

Expert Solution

Answer is given below with working notes and T account


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