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.