Question

Wonderpapa Bhd Statement of Profit or Loss for the year ended 31 December 2016 RM RM 7,000,000 (4.000.000 3,000,000 Turnover Cost of goods sold Gross Profit Less: Expenses Operating expenses Depreciation expenses Loss on sale of machinery Profit before taxation Taxation Net Profit after taxation 800,000 880,000 30,000 (1.710,000) 1,290,000 (300.000) 990,000 The following balances are reported on Wonderpapa Bhd's comparative Statement of Financial Position as at 31 December 2016 RM 2015 RM Non-current Assets Machinery Accumulated Depreciation 3,020,000 (1,647,000) 2,400,000 (800,000) Current Assets Cash Accounts Receivables Inventories Total Assets Stockholders' Equity Share capital Retained earning 600,000 672,000 800.000 3,445,000 200,000 504,000 1.000.000 3,304,000 1,500,000 273.000 1,773,000 1,500,000 200.000 1,700,000 1,172,000 904,000 Non-current Liabilities Loan payable Current Liabilities Accounts Payable Total Equity and Liabilities 500.000 1,672,000 3,445,000 700.000 1,604,000 3,304,000 Additional information: Machinery was purchased at a cost of RM 900,000,

Answer 1

WONDERPAPA BHD
Statement of Cash Flows
For the Year Ended December 31, 2016
(Direct Method)
Cash Flows from Operating Activities
Cash receipts from customers	6832000
Cash paid for inventory	-4000000
Cash paid for operating expenses	-800000
Cash paid for income taxes	-300000
Net cash provided by operating activities		1732000
Cash Flows from Investing Activities
Purchase of machinery	-900000
Sale proceeds from machinery	217000
Net cash used by investing activities		-683000
Cash Flows from Financing Activities
Addition to loan payable	268000
Cash dividends paid	-917000
Net cash used by financing activities		-649000
Net increase in cash		400000
Cash at beginning of period		200000
Cash at end of period		600000

Workings:

Cash receipts from customers
Turnover	7000000
Less: Increase in Accounts Receivable	168000
	6832000
Cash paid for inventory
Cost of goods sold	4000000
Less: Decrease in Inventory	200000
Add: Decrease in Accounts Payable	200000
	4000000

Note: The entire Accounts payable is assumed to pertain to inventory purchases.

Cost of machinery sold = RM2400000 + 900000 - 3020000 = RM280000

Accumulated depreciation on machinery sold = RM800000 + 880000 - 1647000 = RM33000

Book value of machinery sold = RM280000 - RM33000 = RM247000

Sale proceeds from machinery = Book value - Loss on sale of machinery = RM247000 - RM30000 = RM217000

Cash dividends paid = Beg. RE + Net income - End. RE = RM200000 + RM990000 - RM273000 = RM917000