15 Feb A summarized comparative statement of fmancial position of Ba Ltd is presented below together with a statement of Profit and Loss and other comprehensive income for the year ended
A summarized comparative statement of fmancial position of Ba Ltd is presented below together with a statement of Profit and Loss and other comprehensive income for the year ended 30 June 2014. on (,8 Description 30 June 2013 (S) 30 June 2014 ($) Cash 45 O00 35 000 Trade receivables 69 000 105 000 Allowance for doubtful debts (3 000) (6 O00) Inventory I 45 000 – 61000 Available-for-sale investments 53 000 60 000 Plant 187 000 225 000 Accumulated depreciation (35 000) (53 000) $361 O00 $433 000 Accounts payable 65 O00 75 O00 Accrued interest 5 000 7 O00 Current tax payable l5 000 18 000 Deferred tax – 30 O00 37 O00 Borrowings – __ 80 000 100 O00 Share Capital if 100 000 100 000 Investment revaluation reserve 2 000 7 000 Retained earnings 64 000 89 000 $361 000 $433 000 Statement of Profit and Loss and other Comprehensive Income for the year ended 30 June 2014 Description Sales l O35 O00 Cost of sales (774 000) J” Gross Profit 261 OOO Distribution costs (76 000) Administration costs (96 000) Interest Expense (7 O00) Profit before tax 82 O00 Income tax expense (24 000) Profit for the year ss 000 / Other Comprehensive income Gain on revaluation ofinvestments (net of tax) 5 000 ? 40%’ Total comprehensive income _ ‘ $63 000 ,. I |l RD Z M3’ $ Additional information i. The movement in the allowance for doubtful debts for the year comprises: Balance at 30 June 2013 $3 000 Doubtful debts for the year 5 O00 Bad debts written off (2 000) Balance at 30 June 2014 6_0_(E ii. Available-for-sale investments are valued at fair value, with increments/decrements being recognised in the investment revaluation reserve until investments are sold. iii. There were no disposals ofplant during the year. iv. A dividend of $33 000 was paid during the year. v. There were no acquisitions or disposals of investments during the year. Required: a) Discuss two purposes of the statement of cash flows. (4 marks) b) Using the direct method of presenting the cash from operating activities, prepare a statement of cash flows in accordance with IAS 7 for the year ended 30 June 2014. (16 marks) A
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