Calculate the cash flow from operating activities section

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Reference no: EM131792993

Question - Mickelson Ltd manufactures golf clubs for professional golfers. Mickelson Ltd's balance sheets for the years ended 30 June 2010 and 2011 are presented below:

Mickelson Ltd Balance Sheets as at 30 June


2011

2010

ASSETS



Cash

480,000

-

Accounts Receivable

180,000

300,000

Provision for doubtful debts

(60,000)

(40,000)

Property, plant and equipment

780,000

600,000

Accumulated depreciation, Property, plant and equip

(180,000)

(100,000)

Inventory

460,000

260,000

Total Assets

1,660,000

1,020,000




LIABILITIES



Bank Overdraft

-

200,000

Accounts Payable

300,000

300,000

Accrued Wages (Wages Payable)

100,000

80,000

Provision for annual leave

40,000

60,000

Loans

300,000

-

Total Liabilities

740,000

640,000




Net Assets

920,000

380,000




Represented by:



Shareholders' Funds



Share Capital

700,000

100,000

Revaluation Surplus

140,000

40,000

Retained Profits

80,000

240,000

Total Shareholders' Funds

920,000

380,000

The revenues and expenses of Mickelson Ltd for the year ended 30 June 2011 are as follows:


2011


$

Revenue


Sales

300,000

Interest (no interest receivable at year end)

20,000

Gain on sale of property (had a carrying value of $100,000)

40,000

Expenses


Cost of goods sold

200,000

Doubtful debts expense

40,000

Depreciation expense

100,000

Wages expense

100,000

Employee entitlement (annual leave) expense

80,000

 


Net Loss for the year

(160,000)

Additional information:

Mickelson Ltd classifies interest expense payments as operating cash flows.

Required: Calculate the cash flow from operating activities section of Mickelson Ltd's Statement of Cash Flows for the year ended 30 June 2011.

Reference no: EM131792993

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