QUESTION 4 The following information relates to Beethoven Ltd for the year ended 30th June 2022: BEETHOVEN LTD Statement of Financial Performance as at 30 June 2022 2022 2021 $ $ Assets Current Assets Cash at bank 67,710 59,666 Accounts receivable 252,760 283,290 Inventory 1,107,600 951,400 Prepaid expenses 113,600 35,500 Total current assets 1,541,670 1,329,856 Non-current assets Equipment 1,263,800 823,600 Accumulated depreciation – equipment (238,560) (143,136) Total non-current assets 1,025,240 680,464 Total Assets 2,566,910 2,010,320 Liabilities Current Liabilities Accounts payable 348,916 391,940 Accrued expenses 36,920 44,000 Income tax payable 24,400 28,000 Total current liabilities 410,236 463,940 Non-current liabilities Bills payable 75,260 45,440 Debentures payable 198,800 284,000 Total non-current liabilities 274,060 329,440 Total Liabilities Net Assets 684,296 1,882,614 793,380 1 216 940 Equity Shareholders’ Equity Share capital 1,491,000 852,000 Retained profits 391,614 364,940 Total Equity 1,882,614 1,216,940 Question 4 Cont’d The Profit or Loss Statement and general ledger for the year ended 30th June 2022 reflected the following: Sales 3,030,053 Less: sales returns (59,413) Net sales 2,970,640 Cost of goods sold 1,928,360 General expenses (All expenses EXCLUDING depreciation, bad debts written off & Income tax expense) 606,482 Income tax expense 97,860 Bad debts written off 2,840 Depreciation expense Profit after tax 109,624 $225,474 Additional information: 1. A fully depreciated machine with a cost of $14,200 was scrapped during the year. No proceeds were received when it was scrapped. 2. New equipment was purchased for cash during the year for $454,400. 3. No new debentures were issued during the current year. 4. As at 1st July 2021, Beethoven had 284,000 shares issued, at an issue price of $3 per share. During the current year, Beethoven issued an additional 213,000 fully paid shares at an issue price of $3 per share. 5. A cash dividend of 40c per share was declared and paid during the year on all issued shares including those issued during the year. 6. Bills payable are used by Beethoven as part of their longer-term cash management and are repayable within five years. Required: 1. Prepare a cash flow statement for Beethoven Ltd using the Direct method for the year ended 30th June 2022. 2. If a business raised capital to finance the purchase of a non-current asset, how would this information be reported in the statement of cash flows? What other information might you see on the statement of cash flows in relation to the increase in capital?
QUESTION 4
The following information relates to Beethoven Ltd for the year ended 30th June 2022:
BEETHOVEN LTD
Statement of Financial Performance
as at 30 June 2022
|
|
2022 |
|
2021 |
|
|
$ |
|
$ |
|
Assets |
|
|
|
|
Current Assets |
|
|
|
|
Cash at bank |
67,710 |
|
59,666 |
|
Accounts receivable |
252,760 |
|
283,290 |
|
Inventory |
1,107,600 |
|
951,400 |
|
Prepaid expenses |
113,600 |
|
35,500 |
|
Total current assets |
1,541,670 |
|
1,329,856 |
|
Non-current assets |
|
|
|
|
Equipment |
1,263,800 |
|
823,600 |
|
Accumulated |
(238,560) |
|
(143,136) |
|
Total non-current assets |
1,025,240 |
|
680,464 |
|
Total Assets |
2,566,910 |
|
2,010,320 |
|
Liabilities |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable |
348,916 |
|
391,940 |
|
Accrued expenses |
36,920 |
|
44,000 |
|
Income tax payable |
24,400 |
|
28,000 |
|
Total current liabilities |
410,236 |
|
463,940 |
|
Non-current liabilities |
|
|
|
|
Bills payable |
75,260 |
|
45,440 |
|
Debentures payable |
198,800 |
|
284,000 |
|
Total non-current liabilities |
274,060 |
|
329,440 |
|
Total Liabilities Net Assets |
684,296 1,882,614 |
|
793,380 1 216 940 |
|
Equity Shareholders’ Equity |
|
|
|
|
Share capital |
1,491,000 |
|
852,000 |
|
Retained profits |
391,614 |
|
364,940 |
|
Total Equity |
1,882,614 |
|
1,216,940 |
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|
|
|
|
|
|
|
|
|
Question 4 Cont’d
The Profit or Loss Statement and general ledger for the year ended 30th June 2022 reflected the following:
|
|
|
|
|
Sales |
3,030,053 |
|
|
Less: sales returns |
(59,413) |
|
|
Net sales |
|
2,970,640 |
|
Cost of goods sold |
|
1,928,360 |
|
General expenses (All expenses EXCLUDING depreciation, |
|
606,482 |
|
Income tax expense |
|
97,860 |
|
Bad debts written off |
|
2,840 |
|
Depreciation expense Profit after tax |
|
109,624 $225,474 |
Additional information:
1. A fully depreciated machine with a cost of $14,200 was scrapped during the year. No proceeds were received when it was scrapped.
2. New equipment was purchased for cash during the year for $454,400.
3. No new debentures were issued during the current year.
4. As at 1st July 2021, Beethoven had 284,000 shares issued, at an issue price of $3 per share. During the current year, Beethoven issued an additional 213,000 fully paid shares at an issue price of $3 per share.
5. A cash dividend of 40c per share was declared and paid during the year on all issued shares including those issued during the year.
6. Bills payable are used by Beethoven as part of their longer-term cash management and are repayable within five years.
Required:
1. Prepare a cash flow statement for Beethoven Ltd using the Direct method for the year ended 30th June 2022.
2. If a business raised capital to finance the purchase of a non-current asset, how would this information be reported in the statement of
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