Reference no: EM132525922
Preparation of a statement of cash flows
A summarised comparative statement of financial position of Denim Ltd is presented below, together with the statement of profit or loss and other comprehensive income for the year ended 30 June 2016.
30 June 2015 30 June 2016
Cash $ 30 000 $ 68 000
Trade receivables 46 000 70 000
Inventories 30 000 32 000
Investments 35 000 40 000
Plant 125 000 150 000
Accumulated depreciation (23 000) (35 000)
$243 000 $325 000
Accounts payable $ 39 000 $ 43 000
Accrued interest 3 000 5 000
Current tax payable 10 000 12 000
Deferred tax liability - 1 500
Borrowings 60 000 10 000
Share capital 100 000 100 000
Retained earnings 31 000 60 000
Investment revaluation reserve - 3 500
$243 000 $325 000
DENIM LTD Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2016
Sales $ 700000
Cost of sales (483000)
Gross profit 217000
Distribution costs (62000)
Administration costs (74000)
Interest (6000)
Profit before tax 75000
Income tax expense (23000)
Profit for the year 52000
Other comprehensive income
Gain on revaluation of investments (net of tax) 3500
Total comprehensive income $ 55500
Additional information
(a) There were no disposals of investments or plant during the year.
(b) A dividend of $23000 was paid during the year.
(c) The deferred tax liability is in relation to investments.
Required
Question 1: Using the direct method of presenting cash flows from operating activities, prepare a statement of cash flows in accordance with AASB 107/IAS 7 for the year ended 30 June 2016.
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