Apple Valley Orchard had the following cash transactions over the financial year ending 30 June...
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Accounting
- Apple Valley Orchard had the following cash transactions over the financial year ending 30 June 2023. Opening cash balance, 1 July 2022, was $5,000.
| Transaction | Amount |
| Acquisition of building | $575,000 |
| Received loan funds | $150,000 |
| Payment to employees | $92,000 |
| Income Tax paid | $5,000 |
| Sold machinery | $220,000 |
| Drawings | $6,000 |
| Paid bank interest | $1,500 |
| Paid suppliers | $50,000 |
| Cash sales | $140,000 |
Required:
- Prepare a Cash Flow Statement for Apple Valley Orchard for the year ending 30 June 2023 using the information provided.
[6 marks]
- Explain why purchases made on credit terms are not included in the Cashflow Statement. Your answer should include an explanation of the difference between accrual and cash accounting (max 300 words).
[5 marks]
- Explain whether this business could possibly have a profit in the Income Statement. Explain your answer by providing an example. (max 300 words).
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