In: Accounting
Wilko Ltd had cash and cash equivalents at 1 July 2016 of $100 000. The transactions of Wilko Ltd for the year to 30 June 2017 are as follows: 1. Borrowed $30 000 with a 6-month loan payable 2. Received $380 000 cash for customer accounts 3. Sold for $40 000 cash a plant asset with a carrying amount of $30 000 4. Issued ordinary shares for $120 000 cash 5. Purchased a plant asset for $87 000; $27 000 in cash and $60 000 vendor loan 6. Exchanged 10 000 shares for land with a fair value of $100 000 7. Received a $40 000 dividend in cash 8. Invested $100 000 cash on the short-term money market 9. Paid fixed-term loan principal of $80 000 and interest of $8000 10. Cash payments for suppliers accounts $250 000 11. Dividend paid during the period $20000 12. Insurance expense shown in the income statement is $14000. At the end of the year the balance sheet shows prepaid insurance expense of $7000. There was a prepaid insurance expense of $6000 at the beginning of the year. Required: Prepare the statement of cash flows of Wilko Ltd for the year to 30 June 2017.
WILKO LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
PARTICULARS ($) ($)
CASH FLOWS FROM OPERATING ACTIVITIES
CASH RECIEPTS FROM CUSTOMERS 380,000
CASH PAID TO SUPPLIERS (250,000)
CASH FLOW FROM OPERATIONS 130,000
INSURANCE EXPENSE (15,000)
INTEREST PAID (8,000)
NET CASH FLOWS FROM OPERATING ACTIVITIES 107,000
CASH FLOW FROM INVESTING ACTIVITIES
PROCEEDS FROM SALE OF PLANT 40,000
PURCHASE OF PLANT (27,000)
DIVIDENDS RECIEVED 40,000
NET CASH FLOWS FROM INVESTING ACTIVITIES 53,000
CASH FLOW FROM FINANCING ACTIVITIES
PROCEEDS FROM ISSUE OFSHARES 120,000
PROCEEDS FROM SHORT TERM BORROWINGS 30,000
REPAYMENT OF BORROWINGS (80,000)
DIVIDEND PAID (20,000)
NET CASH FLOW FROM FINANCING ACTIVITIES 50,000
NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 210,000
ADD: OPENING CASH AND CASH EQUIVALENTS 100,000
CLOSING CASH AND CASH EQUIVALENTS 310,000
NOTES
THE PURCHASE OF PLANT USING FINANCE FROM VENDOR (CREDIT) IS NOT A CASH FLOW.
THE EXCHANGE OF SHARES FOR LAND IS NOT A CASH FLOW.
INVESTING IN SHORT TERM MONEY MARKET RESULTS IN EXCHANGE OF CASH FOR CASH EQUIVALENT AS MONEY MARKET IS CASH INSTRUMENT.
INTEREST PAID - OPERATING ACTIVITIES
DIVIDEND RECEIVED - INVESTING ACTIVITIES
DIVIDEND PAID - FINANCING ACTIVITIES