Question 2 (25 marks) The draft statement of financial position of Moonland Limi

Question

Question 2 (25 marks) The draft statement of financial position of Moonland Limited for the year ended 31 December 2016 are as below: Statement of financial position as at 31 December 2016 (with comparative figures) 2016 S000 2015 S000 Non-current assets Freehold land Property, plant and equipment Investment properties Intangibles assets 500,000 337,780 15,000 6,000 858,780 470,000 298,000 14,000 6,200 788,200 Current assets Inventories Accounts receivables Short-term investments Cash and bank 27,902 29,075 24,545 37,410 3,500 13,650 79,105 937,885 7,555 64,532 852,732 Total assets Equity and reserves Share capital Revaluation reserves Retained profits 256,000 43,600 402,265 701,865 13,600 362,052 586,512 Current liabilities Accounts payables Other payables Interest payables Tax payables Bank overdraft 26,745 2,100 3,600 13,275 29,340 1,800 3,000 11,250 8,530 53,920 45,720

Explanation / Answer

Statement of cash flows for the year ended December 31, 2016 Cash flow from operations: Net income / (loss) for the year 55975 Adjustments for non-cash operating items:     Depreciation charge 16825     Change in fair value of investments -1000     Gain on sale of property, plant and equipment -80      Inventories writtne down 280      Impairment loss of intangible assets 200 Adjustments for changes in current assets and liabilities:     Increase in accounts receivables -8335     Decrease in inventories 3077     Increase in short term investments -3500     Decrease in accounts payable -2595     Increase in others payable 300     Increase in interest payable 600     Increase in tax payable 2025     Decrease in overdraft -8530 -733 Net cash flow from / (used in ) operating activities 55242 Cash flow from investing activities:     Cash received from sale of equipment 720     Cash paid for acquisition of equipment -57245 Net cash flow from / (used in) investing activities -56525 Cash flow from financing activities:      Cash used for repayment of bank loans -20000      Cash received from issuance of common stock   45140      Deferred tax liabilities paid -2000      Cash payment of dividends -15762 Net cash flow from / (used in) financing activities 7378 Net cash flow 6095 Cash balance at January 1, 2016 7555 Cash balance at December 31, 2016 13650 Dividends paid: Retained earnings as at January 1, 2016 362052 Add: net incme for the year 55975 418027 Les: Retained earnings as at December 31, 2016 402265 Dividends paid 15762

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