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a) Calculate the non-current asset additions for the year {Hint: you will need to complete a T account to reconcile the movement in the net book value of the non-current asset balance. The additions will be the unexplained movement} b) Prepare the operating activities and investing activities sections of the Statement of cash flows for the year ended 30 June 2021  c) Using your answer to part b) comment on the quality of the business’s profits

a) Calculate the non-current asset additions for the year {Hint: you will need to complete a T account to reconcile the movement in the net book value of the non-current asset balance. The additions will be the unexplained movement} b) Prepare the operating activities and investing activities sections of the Statement of cash flows for the year ended 30 June 2021  c) Using your answer to part b) comment on the quality of the business’s profits

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a) Calculate the non-current asset additions for the year
{Hint: you will need to complete a T account to reconcile the movement in the net book
value of the non-current asset balance. The additions will be the unexplained movement}

b) Prepare the operating activities and investing activities sections of the Statement of cash
flows for the year ended 30 June 2021 

c) Using your answer to part b) comment on the quality of the business’s profits 

Question 2 The following are extracts from the financial statements of Crocus Extracts from the Statement of profit or loss for the year ending 30 June 2021 £000 Operating profit 13,480 Investment income 320 Interest expense (2,150) Profit before tax 11,650 Тах (2,900) Profit for the year 8,750 Extracts from the Statement of financial position as at 30 June 2021 £000 £000 Non-current assets (at Net book value) 73,000 70,500 Current assets Inventories 27,500 25,500 Trade receivables 37,500 33,000 Cash 4,250 1,250 Page 3 of 8 Current liabilitios Trade payables 29,450 31,900 Accrued expenses 2,900 2,310
Transcribed Image Text:Question 2 The following are extracts from the financial statements of Crocus Extracts from the Statement of profit or loss for the year ending 30 June 2021 £000 Operating profit 13,480 Investment income 320 Interest expense (2,150) Profit before tax 11,650 Тах (2,900) Profit for the year 8,750 Extracts from the Statement of financial position as at 30 June 2021 £000 £000 Non-current assets (at Net book value) 73,000 70,500 Current assets Inventories 27,500 25,500 Trade receivables 37,500 33,000 Cash 4,250 1,250 Page 3 of 8 Current liabilitios Trade payables 29,450 31,900 Accrued expenses 2,900 2,310
Notes: 1. During the year Crocus sold some of its non-current assets for £1,100,000. The net book value of these items at the date of disposal was £800,000. The depreciation charge for the year was £500,000 2. Both interest and tax were paid in full in the year 3. Investment income represents dividends received in the year a) Calculate the non-current asset additions for the year (Hint: you will need to complete a T account to reconcile the movement in the net book value of the non-current asset balance. The additions will be the unexplained movement) Non current assets at NBV B/fwd C/fwd b) Prepare the operating activities and investing activities sections of the Statement of cash flows for the year ended 30 June 2021 c) Using your answer to part b) comment on the quality of the business's profits
Transcribed Image Text:Notes: 1. During the year Crocus sold some of its non-current assets for £1,100,000. The net book value of these items at the date of disposal was £800,000. The depreciation charge for the year was £500,000 2. Both interest and tax were paid in full in the year 3. Investment income represents dividends received in the year a) Calculate the non-current asset additions for the year (Hint: you will need to complete a T account to reconcile the movement in the net book value of the non-current asset balance. The additions will be the unexplained movement) Non current assets at NBV B/fwd C/fwd b) Prepare the operating activities and investing activities sections of the Statement of cash flows for the year ended 30 June 2021 c) Using your answer to part b) comment on the quality of the business's profits
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