Question

ONLY ANSWER QUESTION 2 PLEASE.

Please include any T Accounts used to figure out values.

Preparation of a statement of cash flows A summarised comparative statement of financial position of Bronze Ltd is presented below, together with a statement of profit or loss and other comprehensive income for the year ended 30 June 2019 LO3, 4, 5 30 June 2018 30 June 2019 $45000 69000 $ 35000 Cash Trade receivables 105000 (6000) 67000 60000 225000 (3000) 45000 53000 Allowance for doubtful debts Inventories Equity investments Plant 187 000 Accumulated depreciation (35 000) (53000) $361000 $433000 $65000 75000 Accounts payable Accrued interest Current tax payable Deferred tax Borrowings Share capital Investment revaluation reserve 5000 7 000 15000 18000 30000 37000 100000 80000 100000 100000 7000 89000 2000 Retained earnings 64 000 $361 000 $433000 BRONZE LTD Statement of profit or loss and other comprehensive income for the year ended 30 June 2019 $1 035000 Sales Cost of sales (774000) Gross profit Distribution costs Administration costs 261000 (76000) (96000) (7000) Interest expense Profit before tax 82000 Income tax expense (24000) Profit for the year Other comprehensive income Gain on revaluation of investments (net of tax) 58000 5 000 $ 63000 Total comprehensive income Additional information The movement in the allowance for doubtful debts for the year comprises the following $3000 Balance at 30 June 2018 Charge for year Bad debts written off 5000 (2000) Balance at 30 June 2019 $6000 Equity investments are shares in other companies that are measured at fair value, with increases/ decreases being recognised in other comprehensive income, and accumulated in the investment revaluation reserve until investments are sold There were no disposals of plant during the year . A dividend of S33 000 was paid during the year There were no acquisitions or disposals of investments during the year Required 1. Using the direct method of presenting cash flows from operating activities, prepare a state- ment of cash flows in accordance with AASB 107/IAS 7 for the year ended 30 June 2019 2. Prepare the operating activities section of the statement of cash flows using the indirect method of presentation.

Answer 1

CASH FLOW FROM OPERATING ACTIVITIES

2019

	2019	2018	INCREASE DECREASE
NET INCOME	58000	-	63000
ADJUSTMENTS:
DEPRECIATION (NON CASH EXPENSE)	53000	35000	18000
(INCREASE)/DECREASE IN CURRENT ASSETS
INCREASE IN TRADE RECEIVABLES NET OF BAD DEBTS ALLOWANCE	99000 [105000-6000]	66000 [69000-3000]	(33000) [66000-99000]
INCREASE IN INVENTORIES	67000	45000	(22000)
INCREASE IN EQUITY INVESTMENT	60000	53000	(7000)
INCREASE /(DECREASE ) IN CURRENT LIABILITES
INCREASE IN ACCOUNT PAYABLE	75000	65000	10000 [75000-65000]
INCREASE IN DEFERRED TAX LIABILITY	37000	30000	7000
INCREASE IN TAX PAYABLE	18000	15000	3000
INCREASE IN ACCRUED INTEREST	7000	5000	2000
CASH FROM OPERATING ACTIVITES			41000 [63000+18000-33000-22000-7000+10000+7000+3000+2000]