Sarah Limited leased a machine which had a fair value of $57,030 to Jane Limited on 30 June 2018 with the following term
Posted: Tue Nov 16, 2021 9:38 am
Sarah Limited leased a machine which had a fair value of $57,030
to Jane Limited on 30 June 2018 with the following terms:
Shown below is an extract from the comparative
statements of financial position and statement of profit or loss of
Guardian Limited for the year ended 30 June 2019:
Guardian Ltd
Statement of Financial Position as at 30 June 2019
30-Jun-19
30-Jun-18
CURRENT ASSETS
$
$
Cash
39,000
76,100
Trade Receivables
143,200
125,300
Allowance for Doubtful Debts
(5,000)
(3,000)
Prepaid Expenses
36,800
37,000
Inventory
286,000
232,200
500,000
467,600
NON-CURRENT ASSETS
Equipment
370,200
344,200
Accumulated Depreciation - Equipment
(96,900)
(67,000)
Land and Buildings
807,000
403,000
Accumulated Depreciation- Buildings
(116,900)
(97,600)
Deferred Tax Asset
5,000
1,000
Long Term Investments
81,000
171,000
1,049,400
754,600
TOTAL ASSETS
1,549,400
1,222,200
CURRENT LIABILITIES
Bank Overdraft
30,700
1,500
Accounts Payable
223,000
229,000
Accrued Expenses
27,500
28,000
Current Tax Liability
37,000
35,000
318,200
293,500
NON- CURRENT LIABILITIES
Deferred Tax Liability
6,500
6,500
Loan Payable
247,500
157,500
Debentures due 30/11/2023
261,000
211,000
515,000
375,000
TOTAL LIABILITIES
833,200
668,500
Share Capital
566,100
402,100
Retained Earnings
150,100
151,600
716,200
553,700
TOTAL EQUITY AND LIABILITIES
1,549,400
1,222,200
Guardian Ltd
Statement of Profit or Loss
for the year ended 30 June 2019
Sales
889,600
Less: Cost of Sales
(539,300)
Gross Profit
350,300
Other Income:
Gain on Sale of Investments
47,500
Less :Operating Expenses:
Administration Costs
(151,000)
Other Expenses
(59,900)
Bad Debts Expense
(3,500)
Depreciation Expense
(49,200)
Interest Expense
(51,000)
Profit before Tax
83,200
Income Tax Expense
(26,010)
Profit for the year
57,190
Additional Information
a. New equipment of $26,000
was purchased for cash.
b. Additions to the buildings
were paid in cash.
c. Long Term Investments with
a carrying amount of $90,000 were sold for cash at a profit of
$47,500.
d. Debentures were issued for
cash.
e. Dividends were paid during
the year in cash.
f. Shares were issued
for cash.
Required:
Prepare a reconciliation of net cash flows arising from
operating activities with profit. (5
marks)
to Jane Limited on 30 June 2018 with the following terms:
Shown below is an extract from the comparative
statements of financial position and statement of profit or loss of
Guardian Limited for the year ended 30 June 2019:
Guardian Ltd
Statement of Financial Position as at 30 June 2019
30-Jun-19
30-Jun-18
CURRENT ASSETS
$
$
Cash
39,000
76,100
Trade Receivables
143,200
125,300
Allowance for Doubtful Debts
(5,000)
(3,000)
Prepaid Expenses
36,800
37,000
Inventory
286,000
232,200
500,000
467,600
NON-CURRENT ASSETS
Equipment
370,200
344,200
Accumulated Depreciation - Equipment
(96,900)
(67,000)
Land and Buildings
807,000
403,000
Accumulated Depreciation- Buildings
(116,900)
(97,600)
Deferred Tax Asset
5,000
1,000
Long Term Investments
81,000
171,000
1,049,400
754,600
TOTAL ASSETS
1,549,400
1,222,200
CURRENT LIABILITIES
Bank Overdraft
30,700
1,500
Accounts Payable
223,000
229,000
Accrued Expenses
27,500
28,000
Current Tax Liability
37,000
35,000
318,200
293,500
NON- CURRENT LIABILITIES
Deferred Tax Liability
6,500
6,500
Loan Payable
247,500
157,500
Debentures due 30/11/2023
261,000
211,000
515,000
375,000
TOTAL LIABILITIES
833,200
668,500
Share Capital
566,100
402,100
Retained Earnings
150,100
151,600
716,200
553,700
TOTAL EQUITY AND LIABILITIES
1,549,400
1,222,200
Guardian Ltd
Statement of Profit or Loss
for the year ended 30 June 2019
Sales
889,600
Less: Cost of Sales
(539,300)
Gross Profit
350,300
Other Income:
Gain on Sale of Investments
47,500
Less :Operating Expenses:
Administration Costs
(151,000)
Other Expenses
(59,900)
Bad Debts Expense
(3,500)
Depreciation Expense
(49,200)
Interest Expense
(51,000)
Profit before Tax
83,200
Income Tax Expense
(26,010)
Profit for the year
57,190
Additional Information
a. New equipment of $26,000
was purchased for cash.
b. Additions to the buildings
were paid in cash.
c. Long Term Investments with
a carrying amount of $90,000 were sold for cash at a profit of
$47,500.
d. Debentures were issued for
cash.
e. Dividends were paid during
the year in cash.
f. Shares were issued
for cash.
Required:
Prepare a reconciliation of net cash flows arising from
operating activities with profit. (5
marks)