Question

REQUIRED (BSBFIA412: 2.2, 2.3, 2.5, and 2.6)

Prepare the Statement of Cash Flow for the year ended 30 June 2019.

The following information is available for the first year of business of Andrew Smith and Rex Johnson.

ANDREW SMITH AND REX JOHNSON

INCOME STATEMENT FOR THE YEAR ENDED 30 JUNE 2019

	$	$
Sales Revenue		195 000
Less Cost of Sales		(105 000)
Gross Profit		90 000
Add: Other income:
Dividend received		3 000
		93 000
Less: Expenses
Advertising	9 200
Wages	28 000
Insurance	5 000
Rent	8 000
Other operating expenses	4 800
Depreciation – Motor vehicle	3 400
Depreciation – Equipment	2 600
		(61 000)
Profit for the year		32 000

ANDREW SMITH AND REX JOHNSON

STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2019

	$	$
Assets
Non Current Assets
Motor Vehicle	25 000
Equipment	30 000
Investment	20 000
		75 000
Current Assets
Inventory	30 000
Account receivables (Note 1 )	13 000
Cash	22 000
		65 000
Total assets		140 000
Equity and Liabilities
Equity
Capital – A. Smith	50 000
Capital – R. Johnson	37 000
Retained profits – A. Smith	18 000
Retained profits – R. Johnson	14 000
Total Equity		119 000
Liabilities
Non Current Liabilities
Loan		10 000
Current Liabilities
Account Payables (Note 2)		11 000
Total equity and liabilities		140 000

Note 1- Account receivables include:

                                                             $

Trade receivables                            11 000

Insurance prepaid                              2 000

Note 2- Account payables include:

                                                              $

Trade payables                                  9 000

Rent due                                            1 200

Other operating expenses due              800

Answer 1

Here is the cash flow statement

I have made it in accordance with US Gaap and shown Dividend Received as OPERATING. It can shown as Investing as well as per IFRS.

Also, I have show Receivables and Payables adjustments in one line each.

ANDREW SMITH AND REX JOHNSON
Statement of Cash Flows
For the Year Ending June 30, 2019
Cash flow from Operating Activities
Profit for the year	$   32,000
Add: Non cash
Depreciation Motor Vehicle	$     3,400
Depreciation Equipment	$     2,600
Cash flow before working capital changes	$   38,000
Purchase of inventory	$ -30,000
Increase in receivables	$ -13,000
Increase in accounts payable	$   11,000
Cash inflow from Operating Activities	$     6,000
Cash flow from Investing Activities
Purchase of motor vehicle	$ -28,400
Purchase of equipment	$ -32,600
Investments purchased	$ -20,000
Cash outflow for Investing Activities	$ -81,000
Cash flow from Financing Activities
Loan taken	$   10,000
Capital Contributed	$   87,000
Cash inflow from Financing Activities	$ 97,000
Net change in cash	$ 22,000
Opening Cash Balance	$           -
Ending Cash Balance	$   22,000