Prepare a statement of cash flows, Cost Accounting

Bickering Ltd Income Statement for the year ended 30 June 2012

  Sales (credit)                                                                           636,100

LESS Cost of sales                                                                   (411,500)

GROSS PROFIT                                                                          224,600

Inventory Loss                                                                             (2,200)

Adjusted Gross Profit                                                                222,400

LESS Operating expenses

            Depreciation of equipment                50,000

            Depreciation of motor vehicles          35,000

            Doubtful debts                                      4,000

            Interest expense                                 11,500

            Wages expense                                   71,300

            Insurance expense                              12,000

            Other expenses                                     8,800            (192,600)

NET PROFIT BEFORE TAX                                                          29,800

LESS Company tax expense                                                      (8,940)

PROFIT AFTER TAX                                                                 $ 20,860

Bickering Ltd Balance Sheets as at:

Current Assets

Cash

Accounts Receivable

Allowance for Doubtful Debts

Inventory

Prepaid Insurance

30/6/12

109,010

38,100

(2,500)

65,500

3,000

213,110

30/6/11

2,140

45,200

(2,000)

70,480

5,000

120,820

Non-current Assets

Motor Vehicles

Less Accumulated Depreciation

Equipment

Less Accumulated Depreciation

Land

 

240,000

(70,000)

650,000

(230,000)

100,000

690,000

 

240,000

(35,000)

640,000

(200,000)

0

645,000

Total Assets

$ 903,110

$ 765,820

Current Liabilities

Accounts Payable

Accrued Interest

Tax Payable

Accrued Wages

 

35,600

8,000

8,940

880

53,420

 

22,700

0

7,350

1,940

31,990

Non-current Liabilities

Loan Payable

 

105,000

 

110,000

Total Liabilities

158,420

141,990

Equity

Share Capital

Retained Earnings

General Reserve

 

580,000

44,690

120,000

744,690

 

465,000

58,830

100,000

623,830

Total Liabilities and Equities

$ 903,110

$ 765,820

Other information:

Bad debts were written off during the year.

Equipment was sold for $10,000 cash.

New equipment was purchased for cash.

A loan repayment was made.

Additional shares were issued.

$20,000 was transferred to the general reserve from retained earnings.

Cash dividends were paid.

Tax was paid.

Required:

(a)   Prepare a statement of cash flows for the year ending 30 June 2012.

(b)   Prepare a reconciliation of profit to net cash flow from operating activities.

(c)    Comment on the cash flows of Bickering Ltd. Maximum 200 words. Referencing is not required. A word count is required.

Posted Date: 2/18/2013 1:31:31 AM | Location : United States







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