Question

Please show the t- accounts for a/c receivable, allowance for doubtful debt, a/c payable , inventory, accured salaries , Plant and accumulated depreciation plant for the statement of cash flow.

Topic 2: Statement of Cash Flows SQ 2-1 The following has been extracted from the trial balances of Peppermint Ltd for the last two years: 2018 (5000) 5,250 1,730 $25 20 1,000 1,030 210 Sales (all on credit) Cost of goods sold Doubtful debts expense Interest expense Rent expense Salaries expense Depreciation expense Gain on sale of plant Cash Inventory Accounts receivable Allowance for doubtful debts Land Plant Accumulated depreciation Bank overdraft Accounts payable Accrued salaries Long-term loan Share capital Dividends paid Retained earnings 2019 (5000) 28,375 17,555 1,837 450 2,000 3,225 735 65 11,424 13,230 20,600 1,960 11,025 7,350 1,715 17,985 14,980 1,617 8,552 9,800 665 ? 2,779 3,780 5,600 560 70 3,150 2,100 490 4,280 200 462 2,240 2,800 5,047 Additional information: plant with a carrying value of $140 000 (original cost S1 260 000 and accumulated depreciation of $1 120 000) was sold during the year. new plant and new land were acquired during the year Required: i prepare an Income Statement for the year ending 30 June 2019 (use the space available on ii. calculate the closing balance of retained earnings as at 30 June 2019 (use the t-account on page 4) iii. prepare a Statement of Financial Position as at 30 June 2019, showing comparative information for the prior year (use the space available on page 5) iv. prepare a Statement of Cash Flows (and reconciliation of profit to operating cash flows) for the year ending 30 June 2019, showing all workings (use the space available on page 6 for the t-accounts and the space available on pages 7 and 8 for the Statement of Cash Flow and supporting notes) page 4)

Answer 1

1. Income Statement -

Peppermint Ltd. Income Statement For the year ending June 30, 2019 $'000 Sales Cost of goods sold Gross Proft $'000 $ 28,375 $ 17,555 $ 10,820 Expenses/ (Income): Doubtful bebt Expense Interest Expense Rent Expense Salaries Expense Depreciation Expense Gain on sale of plant Total Expenses | | | | $ 1,837 $ 450 $ 2,000 $ 3,225 735 $ (65) $ 8,182 Net Income $ 2,638

2. Retained Earnings -

Peppermint Ltd. Retained Earnings As at June 30, 2019 Retained Earnings at the beginning (+) Net Income (-) Dividend Paid $ 5,047 $ 2,638 $ (665) $ 1,973 $ 7,020 Retained Earnings at the End

3. Balance Sheet -

Peppermint Ltd. Balance Sheet As at June 30, 2019 $'000 $'000 Assets Current Assets: Cash Inventory Accounts Receivable Allowance for doubtful debts Total Current Assets $ 11,424 $ 13,230 $ 20,600 $ (1,960) $ 43,294 Property Plant and equipment: Land Plant Accumulated Depreciation $ 11,025 $ 7,350 $ (1,715) $ 5,635 Total Assets $ 59,954 Liabilities and Stockholder's Equity Current Liabilities: Bank Overdraft Accounts Payable Accrued Salaries Total Current Liabilities $ 17,985 $ 14,980 $ 1,617 $ 34,582 Long Term Liabilities: Long Term Loan $ 8,552 Total Liabilities $ 43,134 Stockholder's Equity: Share Capital Retained Earnings Dividend Paid Net Income Total Stockholder's Equity $ 9,800 $ 5,047 $ (665) $ 2,638 $ 16,820 Total Liabilities and Stockholder's Equity $ 59,954

4. Cash Flow Statement -

Peppermint Ltd. Statement of Cash Flow For the year ending June 30, 2019 Cash Flow from Operating Activities Net Income $ 2,638 Adjustments for non cash items Depreciation Expense Gain on sale of plant $ $ 735 (65) $ 670 Change in working capital Increase in Inventory Increase in Accounts Receivable Increase in Accounts Payable Increase in Accrued salaries $ (9,450) $(13,600) $ 10,700 $ 1,417 $(10,933) Net Cash Flow from Operating Activities $ (7,625) Cash Flow from Investing Activities Sale of plant Purchase of Land Purchase of Plant $ 205 $(10,955) $ (5,460) Net Cash Flow from Investing Activities $(16,210) Cash Flow from Financing Activities Long term loan Issue of share capital Dividend Paid $ 8,090 $ 7,560 $ (665) Net Cash Flow from Financing Activities $ 14,985 Change in Cash $ (8,850) Cash at the beginning Cash at the End $ 2,289 $ (6,561)