Question7 These are the account balances of Berrimah Ltd as at 30 June 2016 and
ID: 2408439 • Letter: Q
Question
Question7 These are the account balances of Berrimah Ltd as at 30 June 2016 and 30 June 2017 2017 (S000) 250 130 2016 (S000) 350 110 Sales (all on credit) Cost of goods sold Doubtful debts expense Interest expense 20 30 10 144 180 270 30 150 100 30 25 15 139 160 250 35 150 Cash Accounts receivable Allowance for doubtful debts Accumulated depreciation Bank overdraft Accounts payable Accrued salaries Long-term loan Share capital Opening retained earnings 20 190 18 70 100 120 Additional information: The share capital was increased by the bonus issue of 20,000 shares valued at S1.00 each out of retained earnings. Plant was purchased during the period at a cost of $30.000, with plant with a carrying amount of Snil (cost of $20,000; accumulated depreciation of $20,000) being scrapped. Prepare a statement of cash flows for Berrimah Ltd for the year ending 30 June 2017 showing in Note 1 the reconciliation of net profit to net cash from operating activities and Note 2 showing the reconciliation of cash balances (Recommended time: 60minutes(Marks:34)Explanation / Answer
Answers 7
INCOME STATEMENT
The Sales revenue
$250,000
The Cost of goods sold
$130,000
The Gross Profit
$120,000
The Doubtful debt expense
$25,000
The interest expense
$20,000
The Salaries
$30,000
The Depreciation
$10,000
The Net Profit
$35,000
CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit
$35,000
Add: Non cash expense of Depreciation
$10,000
Cash flows including depreciation
$45,000
Decrease/(Increase) in current assets:
Inventory
($20,000)
(160-180)
Accounts Receivable
($20,000)
(250-270)
Increase/(Decrease) in current liabilities
Accounts payable
$10,000
(200-190)
Accrued salaries
$4,000
(22-18)
Allowance for doubtful debt
($5,000)
(30-35)
Net Cash flow from operating activities
$14,000
CASH FLOWS FROM INVESTING ACTIVITIES
Plant
($30,000)
Total cash flow from Investing activities
($30,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Bank Overdraft
$1,000
(20-19)
Long term loan
$20,000
(90-70)
Total cash flow from financing activities
$21,000
Net Cash Flow
$5,000
(14000-30000+21000)
Cash at the beginning of the year
$139,000
Net Cash Flow
$5,000
Cash at the end of of the year
$144,000
Cash as per Balance sheet at the end of 2017
$144,000
INCOME STATEMENT
The Sales revenue
$250,000
The Cost of goods sold
$130,000
The Gross Profit
$120,000
The Doubtful debt expense
$25,000
The interest expense
$20,000
The Salaries
$30,000
The Depreciation
$10,000
The Net Profit
$35,000
CASH FLOWS FROM OPERATING ACTIVITIES
Net Profit
$35,000
Add: Non cash expense of Depreciation
$10,000
Cash flows including depreciation
$45,000
Decrease/(Increase) in current assets:
Inventory
($20,000)
(160-180)
Accounts Receivable
($20,000)
(250-270)
Increase/(Decrease) in current liabilities
Accounts payable
$10,000
(200-190)
Accrued salaries
$4,000
(22-18)
Allowance for doubtful debt
($5,000)
(30-35)
Net Cash flow from operating activities
$14,000
CASH FLOWS FROM INVESTING ACTIVITIES
Plant
($30,000)
Total cash flow from Investing activities
($30,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Bank Overdraft
$1,000
(20-19)
Long term loan
$20,000
(90-70)
Total cash flow from financing activities
$21,000
Net Cash Flow
$5,000
(14000-30000+21000)
Cash at the beginning of the year
$139,000
Net Cash Flow
$5,000
Cash at the end of of the year
$144,000
Cash as per Balance sheet at the end of 2017
$144,000
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.