Question 1 You have been presented with the Statement of Financial Position for Liffey Ltd below. Statement of Financial Position as at 31st Dec Non-Current Assets: 2019 2018 € Freehold Land 44,000 21,500 94,000 Plant & Equipment Furniture & Fittings 55,200 78,000 227,200 33,500 99,000 Current Assets: 27,400 51,200 Trade Receivables 28,500 56,580 Inventory Bank 27,890 112,970 14,000 92,600 Total Assets 340,170 191,600 Equity and Liabilities Equity: 95,000 5,000 25,000 125,000 Ordinary Share Capital Share Premium Retained Earnings 175,000 20,000 30,000 225,000 Non-Current Liabilities Bank loan 60,000 30,000 Current Liabilities: Taxation 16,400 18,000 Dundalk Institute of Technology May 2021 Trade Payables 18,600 38,770 340,170 191,600 Total Liabilities and Equity In addition, you have been provided with the following information: 1) Profit after tax for the year ended 31 December 2020 was €5,000 2) There was no interest charge but there was a tax charge of €6,500 for the year 3) Depreciation charges for 2020 were as follows a. Plant & Machinery €14,000 b. Fixtures and Fittings €21,000 4) There was no disposal of Non-current assets during 2020 You are required to Prepare the Cashflow statement for Liffey Ltd. for year ended 31" Dec 2020
Question 1 You have been presented with the Statement of Financial Position for Liffey Ltd below. Statement of Financial Position as at 31st Dec Non-Current Assets: 2019 2018 € Freehold Land 44,000 21,500 94,000 Plant & Equipment Furniture & Fittings 55,200 78,000 227,200 33,500 99,000 Current Assets: 27,400 51,200 Trade Receivables 28,500 56,580 Inventory Bank 27,890 112,970 14,000 92,600 Total Assets 340,170 191,600 Equity and Liabilities Equity: 95,000 5,000 25,000 125,000 Ordinary Share Capital Share Premium Retained Earnings 175,000 20,000 30,000 225,000 Non-Current Liabilities Bank loan 60,000 30,000 Current Liabilities: Taxation 16,400 18,000 Dundalk Institute of Technology May 2021 Trade Payables 18,600 38,770 340,170 191,600 Total Liabilities and Equity In addition, you have been provided with the following information: 1) Profit after tax for the year ended 31 December 2020 was €5,000 2) There was no interest charge but there was a tax charge of €6,500 for the year 3) Depreciation charges for 2020 were as follows a. Plant & Machinery €14,000 b. Fixtures and Fittings €21,000 4) There was no disposal of Non-current assets during 2020 You are required to Prepare the Cashflow statement for Liffey Ltd. for year ended 31" Dec 2020
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:Question 1
You have been presented with the Statement of Financial Position for Liffey Ltd below.
Statement of Financial Position as at 31st Dec
Non-Current Assets:
2019
2018
€
Freehold Land
94,000
55,200
44,000
21,500
Plant & Equipment
Furniture & Fittings
78,000
227,200
33,500
99,000
Current Assets:
Trade Receivables
28,500
56,580
27,400
51,200
Inventory
14,000
92,600
Bank
27,890
112,970
Total Assets
340,170
191,600
Equity and Liabilities
Equity:
Ordinary Share Capital
175,000
20,000
95,000
5,000
Share Premium
Retained Earnings
30,000
225,000
25,000
125,000
Non-Current Liabilities
Bank loan
60,000
30,000
Current Liabilities:
Тахation
16,400
18,000
Dundalk Institute of Technology
May 2021
Trade Payables
18,600
38,770
Total Liabilities and Equity
340,170
191,600
In addition, you have been provided with the following information:
1) Profit after tax for the year ended 31 December 2020 was €5,000
2) There was no interest charge but there was a tax charge of €6,500 for the year
3) Depreciation charges for 2020 were as follows
a. Plant & Machinery €14,000 b. Fixtures and Fittings €21,000
4) There was no disposal of Non-current assets during 2020
You are required to
Prepare the Cashflow statement for Liffey Ltd. for year ended 31* Dec 2020
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