Question

188 Chapter 5 5.5 Iul? Danny Care Entity ement of profit or loss and other comprehensive income and statements of financia position are given below. Statement of Profit or loss and Other Comprehensive Income for the Year ended 31 December x5 RM'000 1,440 (140) (180) (200) Revenue (sales) Materials consumed Staff cost Depreciation Loss on sale of plant 890 (40) 05 Interest expense Gain on sale of investment Income from investment Profit before taxation Taxation Profit after taxation Other comprehensive income Surplus on revaluation of land Total comprehensive income Statements of Financial Position as at 31 December RM'000 1,320 500 RM'000 1,100 550 110 320 Ordinary shares Preference shares Revaluation reserve Retained earnings Non-current liabilities 8 percent debentures Current liabilities Bank overdraft Trade payables Tax payable 10 3,488 2.717 1,750 (120) 1,170 478 110 1,650 (110) Non-current assets Land and building (revalued) Accumulated depreciation - building Plant and machinery - carrying value Development expenditure Investment Current assets Inventories Trade receivables Cash in hand 790 40 33 3,488

Answer 1

The cash flow statement is shown below:

B $715 $200 5831 A 2 Profit after tax 3 Adjustments for arriving at cash flows: 4 Depreciation 5 Loss on sale of plant 6 Gain on sale of investment 7 Income from investment 8 Bank overdraft 9 Trade pavables 10 Tax payable 11 Inventories 12 Trade receivables 13 Net cash flow from operations 14 15 Cash flow from investing activities 16 Sale of plant 17 Sale of investment 18 Purchase of plan and equipment * 19 Development expenditure 20 Income from onvestment 21 Net cash flow from investing activities 22 23 Cash flow from finaicng activities 24 Common stock issued (1320-1100) 25 Redemption of preferred shares 26 Redemption of debentures 27 Dividend preferred stock 28 Dividend on common stock 29 Cash flow from financing activities 30 Net cash flow 31 Beginning cash balance 32 Ending cash balance S833 $220 $50

The above results are found using the following formulas:

А 200 25 2 Profit after tax 1715 3 Adjustments for arriving at cash flows: 4 Depreciation 5 Loss on sale of plant 30 Gain on sale of investment Income from investment 50 Bank overdraft 9 Trade payables 10 Tax payable 11 Inventories 12 Trade receivables 13 Net cash flow from operations =B2+B4+B5-B6-B7-B8+B9-B10+B11-B12 14 15 Cash flow from investing activities 16 Sale of plant 200 17 Sale of investment 18 Purchase of plan and equipment 19 Development expenditure 478 20 Income from onvestment 21 Net cash flow from investing activities =B16+B17-B18-B19+B20 22 23 Cash flow from finaicng activities 24 Common stock issued (1320 -1100) =1320-1100 25 Redemption of preferred shares 50 26 Redemption of debentures 27 Dividend preferred stock 50 28 Dividend on common stock 29 Cash flow from financing activities =B24-B25-B26-B27-B28 30 Net cash flow =B13-B21-B29 31 Beginning cash balance 31 32 Ending cash balance =B31+B30 800 50 72

Working note:

Plant purchase Net value as on Dec.31 Depreciation for the year Net value of the old assets Net value of the asset sold Net value of the existing assets Actual net value as at Dec.31 Plant and equipment purchased $790) $190 $600 -$230 $3701 $1,170 800 (1170-370)