Cash Flows Tutorial Question 1
(34,5 marks, 52 minutes)
DYNAMICS LIMITED buys and sells computer equipment. They have a year end of 31
March.
You are the financial accountant of the company, and are busy preparing the annual
financial statements for the year ended 31 March 2015. You have extracted the following
trial balance from the accounting system on 31 March 2015:
Debits
Land
Buildings at carrying value
Equipment at cost
Office furniture at cost
Share investments at fair value
Bank
32 Day Call Account
Trade debtors
Accrued interest income
Inventories
Pre-paid salaries
Cost of sales
Salaries and wages
Donation
Depreciation
Sundry expenses
Credit losses
Interest expense
Loss on the sale of office furniture
Income tax expense
Dividend expense
1
1
1
2
Credits
Accumulated depreciation:
Buildings
Equipment
Office furniture
Mortgage Bond
Trade creditors
Commission income received in advance
Current tax payable
Shareholders for dividends
Loan: Unity Bank
Ordinary share capital
Non-cumulative preference shares
Retained earnings
Revenue
Commission income
Gain on re-measurement of share investments
to
1
1
3
2015
100 000
300 000
204 000
32 250
39 000
504 544
12 000
33 000
2 550
29 625
3 000
2 840 000
360 000
27 000
45 241
119 750
2 025
?
1 300
48 338
47 750
?
2014
100 000
170 000
121 500
24 750
16 500
276 438
19 500
27 000
1 350
36 000
4 000
2 560 000
327 273
24 545
33 957
108 700
1 841
13 640
2 523
43 711
22 500
3 935 728
31 386
93 300
12 500
84 000
43 500
1 350
12 750
7 500
?
247 500
250 000
173 325
3 550 000
16 200
9 500
21 545
60 750
14 850
90 000
37 500
1 228
15 340
4 500
150 000
150 000
88 425
3 200 000
14 727
6 136
fair value
Interest income
3 000
?
2
2 727
3 935 728
Additional information:
1.
The following relates to property, plant and equipment for the year ended
31 March 2015:
1.1
A loan from Unity Bank was taken out to finance the purchase of equipment
on 1 October 2014. Repayments are made monthly in arrears over 5 years,
and include interest at 8%. There were no other purchases or sales of
equipment during the year.
1.2
Buildings depreciation for the year amounted to R9 841.
1.3
Office furniture was sold during the year for R1 500. This was the only
property, plant and equipment that was sold during the current financial
year.
2.
Computers were donated to a school during the current financial year. This
was the only donation that was made by the company during the current
financial year.
3.
Non-cumulative preference shares were issued in June 2013 at R1.50 each.
These shares have a fixed preference dividend of R0.05 per share. On
30 June 2014 the additional shares were issued.
4.
Interest on the long-term loan of R7 560 was paid during the current financial
year.
REQUIRED
1. Present only the investing and financing activities portions of the statement of
cash flows of Dynamics Limited for the year ended 31 March 2015 in accordance
with International Financial Reporting Standards (IFRS).
(16.5)
NOTE -
Comparative amounts are not required.
Round final amounts to the nearest Rand.
Notes are not required
3
2. Prepare a reconciliation between the profit for the year and the cash
generated from operations of Dynamics Limited for the year ended 31
March 2015. (18)
NOTE -
Round final amounts to the nearest Rand.
4