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Cashflow Practice - Additional
Cashflow Practice - Additional
The statements of financial position of Allthrough Ltd as at 30 June 2017 and 30 June 2016
are presented below.
ALLTHROUGH LTD
Statements of Financial Position
as at 30 June
2017 2016
Current assets
Cash at bank $ — $ 74 600
Accounts receivable 127 200 111 300
Inventory 275 000 221 200
Prepayments 22 800 23 000
Non-current assets
Buildings 639 000 339 000
Accumulated depreciation – buildings (111 400 ) (97 600 )
Equipment 361 200 331 200
Accumulated depreciation – equipment (89 900 ) (67 000 )
Land 168 000 39 00
Long-term investments 70 000 0
Total assets 1 461 90 $ 160 00
0 0
1 134 70
0
Current liabilities
Bank overdraft $ 16 700 $ —
Accounts payable 215 000 218 000
Accrued expenses 10 500 14 000
Current tax liability 26 000 24 000
Non-current liabilities
Loan payable $ 240 000 $ 150 000
Debentures due 1/9/21 300 000 200 000
Total liabilities 808 200 606 000
Net assets 653 700 528 700
Equity
Share capital $ 502 100 $ 388 100
Retained earnings 151 600 140 600
Total equity $ 653 700 $ 528 700
Examination of the company’s general ledger accounts revealed the following:
(a) Depreciation expense was recorded during the year as follows: buildings $13 800; and
equipment $22 900.
(b) An extension was added to the building at a cost of $300 000 cash.
(c) Long-term investments with a cost of $90 000 were sold for $125 000.
(d) Vacant land next to the company’s plant was purchased for $129 000 with payment
consisting of $39 000 cash and a loan payable for $90 000 due on 31 July 2018.
(e) Debentures of $100 000 were issued for cash at nominal value.
(f) Thirty thousand shares were issued at $3.80 per share.
(g) Equipment was purchased for cash.
(h) Sales for the period were $875 600; cost of sales amounted to $525 300; other expenses
(excluding depreciation, carrying amount of investments sold, interest, and bad debts)
Workshop 10 Questions
amounted to $149 400.
(i) Bad debts of $3500 were written off.
(j) Income tax paid during the year amounted to $73 700.
(k) Interest expense and interest paid amounted to $40 000.
(l) The bank overdraft is integral part of the company’s cash management function.
Required
A. Prepare the statement of cash flows of Allthrough Ltd for the year ended 30 June 2017
using the direct method of presentation.
B. Prepare a note disclosure to reconcile net cash flows from operating activities with the
profit for the year and also prepare any other notes required by AASB 107.