Cashflow Handout

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AFW3050 Lecture 1 Handout: Statement of Cash Flows (Deegan, Q20.17) Cabarita Ltd is involved in manufacturing swimming pool accessories. Cabarita Ltd’s statements of financial position for the years ended 30 June 2012 and 30 June 2013 are presented below. 2013 ($) Assets Cash Accounts receivable Allowance for doubtful debts Inventory Property, plant and equipment Less Accumulated depreciation Total assets Liabilities Bank overdraft Accounts payable Accrued wages Provision for annual leave Loans Total liabilities Net assets Equity Share capital Revaluation reserve Retained earnings Total equity 96 000 36 000 (12 000) 92 000 156 000 (36 000) 332 000 2012 ($) 60 000 (8 000) 52 000 120 000 (20 000) 204 000

60 000 20 000 8 000 60 000 148 000 184 000 140 000 28 000 16 000 184 000

40 000 60 000 16 000 12 000 128 000 76 000 20 000 8 000 48 000 76 000

The statement of comprehensive income (extract) of Cabarita Ltd for the year ended 30 June 2013 is: 2013 ($)

Income Sales Interest (no interest receivable at year end) Profit on sale of property (which had a written-down value of $20 000) Expenses Cost of sales Doubtful debts Depreciation Wages Employee entitlements Profit (loss) for the year

60 000 4 000 8 000 (40 000) (8 000) (20 000) (20 000) (16 000) (32 000)

1

Required: Prepare a Statement of Cash Flows for Cabarita Ltd for the year ending 30 June 2013. Comparatives are not required.

Solution Cash receipts from customers Allowance for Doubtful Debts

Accounts Receivable

Cash payments for inventory Inventory

Accounts payable

Accrued expenses Accrued wages

2

Provision for annual leave

PPE Profit on sale of property = Accumulated depreciation

Cost of property sold = PPE

*ignoring tax effect

Cash flows from financing activities Share capital

Loan payable

3

Retained earnings

No dividends paid.

Cabarita Ltd Statement of Cash Flows for the year ended 30 June 2013

Cash flows from operating activities...
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