Prepare the cash flow statement of star ltd for the year

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Reference no: EM131806625

Star Ltd is a retailer which sells blankets. The following information is available for the year ended 31 August 2015:

Statement of financial position of Star Ltd as at 31 August 2015

 

2015

2014

R

R

Non-current assets:

 

 

Equipment

53000

27000

 

 

 

Current assets:

 

 

Inventory

4000

3800

Bank

21300

12300

 

25300

16100

 

 

 

Total assets

78300

43100

 

 

 

Equity:

 

 

Share capital: class A

33000

25000

Retained earnings

22500

4000

 

55500

29000

Non-current liberties:

 

 

Long-term loans

15500

4000

 

 

 

Current liabilities:

 

 

SARS (income tax)

3000

2100

Income received in advance

2200

1600

Trade payables

2100

6400

 

7300

10100

 

 

 

Total equity and liabilities

78300

43100

Statement of comprehensive income of Star Ltd for the year ended 31 August 2015

 

R

Sales income

122000

Cost of sales expense

(43000)

Gross profit

79000

Net operating costs

(44000)

Operating profit

35000

Interest expense

(4200)

Profit before tax

30800

Taxation expense

(12300)

Net profit for year

18500

Additional information

1. Net operating costs reported on the statement of comprehensive income for the year ended 31 Augus 2015 included the following items:

Bad debts expense

2000

Wages expense

24000

Rent expense

10000

Depreciation expense

4000

Profit on disposal of equipment

3000

2. 20 000 Class A shares were issued for 50c each during the year. and share issue costs of R2 000 were incurred and paid during the year.

3. No dividends were declared during the year ended 31 August 2015.

4. During the year. Equipment with a carrying amount of R20 000 was sold.

5. The company raised loans of R14 000 during the year ended 31 August 2015. You are required to:

Prepare the cash flow statement of Star Ltd for the year ended 31 August 2015. Using the indirect method.

Reference no: EM131806625

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