An extract from the balance sheets of Mum & Dra Pty Ltd showed the following for
ID: 2411294 • Letter: A
Question
An extract from the balance sheets of Mum & Dra Pty Ltd showed the following for the years ended 30 June 2013 and 30 June 2014:
Current Assets
30 June 2013
30 June 2014
Bank
Accounts receivable
Allowance (provision) for doubtful debts
Inventory
Bills Receivable
17,000
67,000
- 3,000
52,000
10,000
19,300
61,000
- 2,000
55,000
14,000
Current Liabilities
Accounts payable Taxation payable Provision for annual leave Provision for dividend
44,000
12,000
14,000
16,000
48,000
14,000
22,000
22,000
Additional Information:
Net profit after taxation is $244,000. This profit was determined after accounting for the following income and expense items:
$
Depreciation
36,000
Gain on sale of plant
18,000
Transfer from the allowance (provision) for doubtful debts
1,000
Transfer to provision for annual leave
8,000
Required: Determine the net cash provided from operating activities for the year ended 30 June 2014, by completing the reconciliation with profit after tax
Please use the following format
Reconciliation of profit after tax to cash flows from operating activities
Profit after tax
Add (subtract) non cash items
Add (subtract) movements in balance sheet
Net cash from Operating Activities
Current Assets
30 June 2013
30 June 2014
Bank
Accounts receivable
Allowance (provision) for doubtful debts
Inventory
Bills Receivable
17,000
67,000
- 3,000
52,000
10,000
19,300
61,000
- 2,000
55,000
14,000
Current Liabilities
Accounts payable Taxation payable Provision for annual leave Provision for dividend
44,000
12,000
14,000
16,000
48,000
14,000
22,000
22,000
Explanation / Answer
Reconciliation of profit after tax to cash flows from operating activities Profit after tax $244,000 Add (subtract) non cash items Depreciation expenses $36,000 (Gain) on sale of plant -18000 Add (subtract) movements in balance sheet Decraese in Accounts receivable (67000-3000)-(61000-2000) $5,000 (Increase) In Inventory -3000 (Increase) In Bill receivable -14000 Increase in Accounts payable 4000 Increase in Taxation payable 2000 Increase in provison for Annual leave 8000 $20,000 Net cash from Operating Activities $264,000 If any doubt please comment
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