Statement of cash flows
Comparative information as at 30 June 2023 and 30 June 2024 for Declare Ltd is as follows.
DECLARE LTD
Comparative statements of financial position
as at 30 June
2023
2024
Assets
Cash at bank 62,000 43,000
Accounts receivable 76,000 84,500
Inventory 124,000 113,500
Land 62,500 25,000
Buildings 137,500 265,000
Accumulated depreciation — buildings (85,000) (100,000)
Plant and equipment 40,000 40,000
Accumulated depreciation — plant and equipment (5,000) (10,000)
412,000 461,000
Liabilities and equity
Accounts payable 60,500 67,000
Interest payable 750 250
Other expenses payable 8,750 3,000
Mortgage loan payable 45,000 66,250
Share capital 125,000 125,000
Retained earnings 172,000 199,500
412,000 461,000
Additional information
1. Gross profit for the year ended 30 June 2024 was $160,500 and consisted of the following.
Sales 443,500
Cost of sales 283,000
2. Purchases of inventory for the year were $272,500.
3. All purchases and sales of inventories were on credit.
4. Profit for the year ended 30 June 2024 was $31,250, after deducting expenses of $129,250 from the gross profit figure.
5. Expenses of $129,250 include depreciation on buildings, and on plant and equipment, a loss on sale of land, and $5,000 in interest expense.
6. During the year ended 30 June 2024, cash dividends were paid.
7. Building extensions were paid for during the year, and a block of land, costing $37,500, was sold for $31,250 cash.
8. No plant was purchased or sold during the year.
Required
(a) Prepare the Statement of Cash Flows for Declare Ltd for the year ended 30 June 2024 using the direct method.
(b) Complete T-accounts to show your workings for preparing the Statement of Cash Flows for Declare Ltd.