50.1K

Verified Solution

Link Copied!

Question 1 You are provided with Cashing Ltd's information for the financial year ended 30 June 2021. (a) Information extracted from the Income Statement on 30 June 2021: $ Sales 6,200,000 Depreciation 425 000 Interest on loan 188 000 Net profit before tax 1 600 000 Net profit after tax 1 120 000 (b) Fixed Assets (carrying amount) Other Current Assets Inventories Trade and other receivables Corporation tax Cash and cash equivalents TOTAL ASSETS 2021 $ 7, 350,000 610 000 235 000 262 000 14 000 99 000 7 960 000 2020 $ 6, 931,000 422 000 90 000 330 000 NIL 2 000 7 353 000 Ordinary share capital Retained income 4 700 000 803000 3 800 000 223000 Non-current Liabilities: Bank borrowigs Current Liabilities Trade and other payables Corporation tax Dividends Bank overdraft TOTAL EQUITY AND LIABILITIES 2 100 000 357 000 132 000 NIL 225 000 NIL- 7 960 000 2 800 000 530 000 180 000 28 000 200 000 122 000 7 353 000 Events and transactions during 2021. (1) 150,000 new shares were issued during the year at $8 each. (2) An interim dividend of $270,000 was paid on 1 January 2021. (3) Fixed assets were sold during the year, at a carrying amount of $86,000. Additional equipment was purchased to replace the assets sold. Required: (a) Prepare the Cash Flow Statement for Cashing Ltd for the year ended 30 June 2021 (b) Advice management based on the findings of the cash flow statement. Show all relevant workings Hint: For the ordinary share captal in pat (C), consider when recociling, the share capital movements of issue of new shars and share backs. By the company. ( 8+2 =total 10 marks) ANSWER HERE

Answer & Explanation Solved by verified expert

See Answer