Question 1: Rad Ltd sells vinyls and music related merchandise

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Question 1:

Rad Ltd sells vinyls and music related merchandise. For the year ended 30 June 2021, Rad Ltd recorded a Profit after tax of $32,000 after deducting from sales of $978,000 the following expenses: cost of sales $565,000, depreciation on buildings $80,000, bad debts $15,000, interest $35,000, discount allowed $3,000, other accrued expenses $200,100, and income tax $47,900.

The following additional information is available from Rad Ltd statement of financial position as at 30 June 2021:                                                                                            

	2021	2020
	$	$
Accounts Receivable	49,300	37,800
Allowance for doubtful debts	(5,000)	(3,000)
Inventory	94,200	96,600
Prepaid expenses	19,000	15,000
Deferred tax asset	12,000	14,400
Accounts payable	58,000	45,400
Provision for employee benefits	21,000	18,000
Other accrued expenses	23,500	25,000
Interest payable	40,000	20,000
Current tax liability	13,500	15,000
Deferred tax liability	22,000	20,900

                       

Required:

Calculate and prepare Cash Flows from Operating Activities (an extract from the Statement of Cash Flows) in accordance with AASB107 for the year ended 30 June 2021 Use the direct method.

Question 2

Divine Ltd reported the following information for the year ended 30 June 2021:

	2021	2020
	$	$
Land	300,000	250,000
Buildings	650,000	175,000
Accumulated depreciation	(235,000)	(100,000)
Plant	570,000	490,000
Accumulated depreciation	(280,000)	(175,000)
Asset revaluation surplus - land	45,000	10,000

Additional information:

• Land was revalued during the year. The tax rate is 30%.

• Plant with a cost of $60,000 and an accumulated depreciation of $15,000 was sold for cash during the year. A gain on sale of plant $18,000 was recorded in the profit or loss statement.

• Plant was also purchased during the year.

• A new building was purchased: $350,000 was paid for by borrowing arrangements with the bank and the balance was paid in cash. There were no buildings sold.

Required:

Calculate and prepare Cash Flows from Investing Activities (an extract from the Statement of Cash Flows) in accordance with AASB107 for the year ended 30 June 2021.

Question 3

Pretty Ltd reported the following information for the year ended 30 June 2021:

	2021	2020
Bank overdraft	9,000	4,500
Dividend payable	20,000	18,000
Bank loan	210,000	180,000
Share Capital	475,000	390,000
Retained earnings	176,500	210,000
Profit after tax	25,500

Additional information:                                                                      

• An interim dividend was paid during the year: $30,000 was paid by way of a bonus share issue, the remainder of the interim dividend was paid in cash.

• Land was purchased during the year, with part payment made by taking out a bank loan of $50,000.

• Repayments on bank loans for the year amounted to $40,000.

Required:

Calculate and prepare Cash Flows from Financing Activities (an extract from the Statement of Cash Flows) in accordance with AASB107 for the year ended 30 June 2021.