Question

can you expain with steps?

The comparative, unclassified statement of financial position for Sunland Ltd. shows the following balances at December 31: Cash $0 Sunland Ltd. Statement of Financial Position December 31 Assets 2018 2017 $ 43,000 Accounts receivable 22,000 37,000 Inventory 35,000 57,000 Land 96,000 105,000 Buildings 523,000 259,000 Accumulated depreciation-buildings (72,000) (104,000) Equipment 75,000 38,000 Accumulated depreciation-equipment (12,000) (6,000) Total assets $710,000 $386,000 Liabilities and Shareholders' Equity Bank overdraft $0 $11,000 Accounts payable $ 42,000 $ 21,000 Income tax payable 3,000 2,000 Interest payable 4,000 5,000 Dividends payable 3,000 1,000 Bank loan payable-current portion 22,000 24,000 Bank loan payable-non-current portion 384,000 207,000 Common shares 205,000 90,000 Retained earnings 47,000 25,000 Total liabilities and shareholders' equity $710,000 $386,000

Answer 1

Amount $59,000 Sunland Ltd Statement of Cash Flows - Indirect Method For year ended December 31, 2018 Particulars Amount Cash Flow from Operating Activity Net Income Adjustment reconcile net income net cash flow from operating activities Add: Depreciation Expense - Equipment $78,000 Less: Gain on Sale of Land ($9,000) Less: Gain on Sale of Building ($42,000) Add: Loss on sale of equipment $5,000 Decrease in Accounts Receivable $15,000 Decrease in inventory $22,000 Increase in accounts payable $21,000 Increase in Income tax payable $1,000 Decrease in Interest Expense ($1,000) Changes in Working Capital Net Cash Flow from Operating Activity Cash Flow from Investing Activity Purchase of Building ($3,65,000) Purchase of Equipment ($63,000) Proceeds from Sale of Land ($105000-$96000+$9000] $18,000 Proceeds from Sale of Building $55,000 Proceeds from Sale of Equipment $5,000 Net Cash Flow used in Investing Activity Cash Flow from (used for) Financing Activity Repayment of Bank Overdraft ($11,000) Proceeds from borrowings $1,75,000 Proceeds from issue of common shrares ($205000-$90000] $1,15,000 Dividend paid ($35,000) Net Cash Flow from Financing Activity Net Increase in Cash and Cash Equivalents Add : Opening Cash Closing Cash $90,000 $1,49,000 ($3,50,000) $2,44,000 $43,000 $0 $43,000

Increase /(Decrease) (A) - (B) ($15,000) ($22,000) $21,000 $1,000 ($1,000) Working 1 Depreciation Expense Closing Balance of Accumulated Depreciation - Equipment $12,000 Less: Opening Balance of Accumulated Depreciation - Equipment ($6,000) Add: deprecition on sold eqipment $16,000 Depreciation Expense - Equipment $22,000 Depreciation Expense - Building $56,000 Depreciation Expense for the year $78,000 2 Particulars Closing Balance Opening Balance (A) (B) Accounts Receivable $22,000 $37,000 inventory $35,000 $57,000 Accounts Payable $42,000 $21,000 Income Tax Paybale $3,000 $2,000 Interest Payable $4,000 $5,000 Increase in Current Assets is Cash Outflow and Decrease in Current Assets in Cash Inflow Increase in Current Liability is Cash Inflow and Decrease in Current Liability in Cash Outflow 3 Ending Loan Payable Current portion $22,000 Non Current portion $3,84,000 $4,06,000 Less: Beginning Loan payable Current portion $24,000 Non Current portion $2,07,000 $2,31,000 Proceeds from Borrowing $1,75,000 4 Beginning Retained Earnings $25,000 Add: Net Income $59,000 Less: Ending Retained Earnings ($47,000) Dividend Declared $37,000 Dividend Payable Opening Balance $1,000 Add: Dividend Declared $37,000 $38,000 Less: Closing Balance ($3,000) Dividend paid $35,000