Question

Question 2

The following are the financial statements for the year ended 30^th June 2020.

Sales (credit)			500,000
Cost of goods sold			(300,00)
Gross profit			200,000
Loss on sale of plant	5,000
Depreciation – buildings	4,000
Depreciation – plant and equipment	8,000
Bad and doubtful debts	2,600
Other administrative and selling expenses	140,000		(159,600)
Profit before tax			40,400
Tax expense			(10,000)
Profit after tax			30,400
Dividend – Ordinary share			(20,750)
Retained profits			9,650

Earth Ltd Balance Sheet as at 30 June
	2020		2019
Current assets
Cash at bank	55,500		34,500
Accounts receivable	228,000		131,000
Provision for doubtful debts	(8,000)		(6,000)
Inventory	55,000		83,000
Non-current assets
Land	80,000		45,000
Buildings	136,000		112,000
Acc. Depreciation - Buildings	(28,000)		(24,000)
Plant and equipment	114,000		100,000
Acc. Depreciation – Plant and equipment	(64,000)		(64,000)
	568,500		411,500
Current liabilities
Accounts payables	112,600		118,000
Accrued expenses: Other administrative expenses	19,000		12,000
Dividend payable	5,250		6,500
Tax payable	3,000		1,000
Non-current liabilities
Debenture	120,000		100,000
Shareholders’ equity
Ordinary shares	225,000		120,000
Asset revaluation reserve	20,000		0
Retained earnings	63,650		54,000
	568,500		411,500

Notes:

1.      A piece of existing land has been revalued upwards. Two pieces of land were acquired during the year. There was no disposal of land during the year.

2.      Plant and equipment costing $33,000 was sold.

3.      No buildings were sold during the year.

Required:

Prepare a cash flow statement for the year ended 30 June 2020 as per AASB107 (show all workings).

Answer 1