Question

QUESTION FIVE [25] The following information was obtained from the accounting records of First Ltd: Summarised financial position for year ended 31 December 2018 2019 R R 95 470 104 865 Nil 1 100 1 600 ASSETS Land and buildings Investments Machinery at carrying amount Cost Accumulated depreciation Inventories Trade debtors Cash at bank 6 500 8 700 (2 200) 12 000 5 400 (3 800) 9 000 10 205 30 700 Nil 13 500 TOTAL ASSETS 147 070 137 870 EQUITY & LIABILITIES 100 070 78 470 Equity Ordinary share capital Retained earnings 85 000 68 000 10 470 15 070 47 000 59 400 30 000 20 000 Nil Liabilities Long term loan Bank overdraft Trade creditors Income tax payable Dividends payable 700 9 200 6 600 2 000 4 100 18 400 15 400

Answer 1

Cash Flow Statement (Indirect Method)
Particulars	Amount	Amount
Profit for the year		$      23,000.00
Adjustments to reconcile net income to:
Net cash provided by operating activities
Depreciation	$        1,000.00
Profit on sale of land and buildings	$       (7,000.00)
Profit on sale of machinery	$          (300.00)
Loss on sale of investment	$           500.00
Decrease in trade debtors	$      20,495.00
Increase in Inventory	$       (3,000.00)
Decrease in income tax payable	$       (2,100.00)
Decrease in trade creditors	$       (2,600.00)
Net Cash Generated		$        6,995.00
Net cash provided by operating activities	(A)	$      29,995.00
Cash Flows from Investing Activities
Sale of Investment	$           600.00
Sale of land and buildings	$      18,000.00
Purchase of land and buildings	$    (20,395.00)
Sale of machinery	$           800.00
Purchase of machinery	$       (6,400.00)
Net cash provided by investing activities	(B)	$       (7,395.00)
Cash Flows from Financing Activities
Dividend Paid	$    (15,400.00)
Repayment of long term loan	$    (10,000.00)
Repayment of bank overdraft	$          (700.00)
Increase in Ordinary Capital	$      17,000.00
Net cash provided by Financing activities	(C')	$       (9,100.00)
Net increase/decrease in cash	(A+B+C')	$      13,500.00
Add:Opening cash balance		$                    -
Closing cash balance		$      13,500.00

Workings:

Retained Earnings
Dividend	$ 18,400.00	Beg. Bal.	$ 10,470.00
End. Bal.	$ 15,070.00	Profit	$ 23,000.00
	$ 33,470.00		$ 33,470.00
Dividend Payable
Cash	$ 15,400.00	Beg. Bal.	$ 15,400.00
End. Bal.	$ 18,400.00	Dividend	$ 18,400.00
	$ 33,800.00		$ 33,800.00

Will this work?