Question

COMPARATIVE BALANCE SHEETS AS AT JUNE 30 2020 2019 $'000's $'000's 146 134 Current Assets Cash at Bank Accounts Receivable Prepaid Insurance Inventory 52 45 10 6 58 46 250 170 Non-Current Assets Machinery less Accum. Depr Machinery Investments Total Assets 90 160 60 110 50 20 476 361 42 58 Current Liabilities Accounts Payable Wages Payable Income Tax Payable 3 8 10 5 Non-Current Liabilities Loan 130 100 185 171 Total Liabilities Net Assets 291 190 Shareholders' Equity Share Capital 60 50 Retained Profits 231 291 140 190

Answer 1

Answer-

ini (Amount in $'000's) STATEMENT OF CASH FLOW FOR THE MONTH ENDED 30 JUNE 2020 Particular $ $ Cash flow from Operating Activities Receipt from customers (a) 980 Payment to suppliers & employee (b) (829) Interest received 4 Interest paid (8) Income Tax paid (c) (45) $ 102 Cash flow from Investing Activity Cash on Disposal of Machinery (d) 50 Purchase of Machinery (d) (120) Purchase of Investments (-50-20) $ (30) $ (100) Cash flow from Financing Activity Loan (130-100) 30 Share capital issued (60-50) 10 Dividends paid (e) (30) $ 10 Net increase/decrease in Cash held $ 12 Cash at the beginning of the year $ 134 Cash at the end of the year $ 146 Interest received and paid are considered in Opertaing Activities based on assumption that company is a finance company. (as these are considered in operating activitiesin format given in Question) un ini Notes a. Receipt from customers Sales $ 995 Less :Increase in Account Receivable $ (7) (--(52-45)] Less: Bad Debts Expense $ (8) Receipt from customers $ 980 Bad debt expense is reduced based on assumption that these are considered in account receivable

600 12 (=58-46] 612 16 (--(42-58)] 628 b Payment to suppliers & employee and other expenses Cost of Goods Sold $ Add: increase in Inventory $ Purchase $ Add: Decrease in Account payable $ Cash Paid for purchases $ Expenses: Wages Expense $ Add Decrease in Wages Payable $ Selling and Distribution Expenses $ Administrative Expenses $ Add: Increase in Prepaid Insurance $ Cash paid for expenses $ Payment to suppliers & employee and other expenses 5 120 72 4 [=10-6] 201 829 (=628+201]

c Cash Paid for taxes expense Income tax Expense Less : Increase in Tax payable Cash Paid for taxes expense $ $ 50 (5) (--(10-5)] 45 $ d Purchase of Machinery Cost of machinery sold Cash on Disposal of Machinery Profit on sale WDV of machine sold Cum Dep on Machine sold 40 50 20 30 (=50-20) 10 (-40-30] $ Opening Balance Less - Cost of Machinery Sold Cost of Machinery after Machinery sold Closing Balance Purchase of Machinery $ $ $ 170 40 130 (170-40] 250 120 (250-130] e Dividends paid Opening retained Earning Add: Net Profit Less: Closing retained Earning Dividends paid $ $ $ S 140 121 (231) 30

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