The directors of Transport Ltd produced the following Statement of profit or loss account for 2017 and statement of financial Position as 31st December 2017 with the 2016 comparatives. Transport Ltd Statement of Profit or Loss Account for the year ended 31st December 2017 Revenue 320,000 Cost of Sales (143,000) Gross Profit 177,000 Interest received 5,000 Gain on disposal of equipment 7,000 Depreciation (39,000) Administrative and selling expenses (13,000) Operating Profit before Interest and taxes 137,000 Interest expenses (20,000) Profit before tax 117,000 Taxation (35,000) Profit after tax 82,000 Statement of financial position as at 31st December 2017 Non-current assets 2017 GHC 2016 GHC Vehicles at cost 195,000 130,000 Less: Accumulated depreciation (79,000) (52,000) 116,000 78,000 Investment 100,000 80,000 Current Assets Inventory 26,000 20,000 Trade Receivables 23,000 21,000 Cash and Cash equivalent 43,000 6,000 Total assets 308,000 205,000 EQUITY AND LIABILITIES Equity Stated Capital 152,000 120,000 Share Premium 26,000 23,000 Retained Earnings 68,000 17,000 Non-Current Liabilities 246,000 160,000 Long-Term loan 26,000 18,000 Current Liabilities Trade payables 18,000 13,000 Interest Payable 8,000 7,000 Tax Payable 10,000 7,000 Total Current Liabilities 36,000 27,000 Total Equity and Liabilities 308,000 205,000 Additional Information The dividend paid during 2017 was GHC31,000. The retained earnings increased by GHC82,000 profit of the period and decreased by the amount of the dividend GHC31,000. During 2017, the company acquired vehicles costing GHC90,000. During 2017, the company sold vehicles that had an original cost of GHC25,000 and accumulated depreciation of GHC12,000. The proceeds of sale were GHC20,000. Required:

The directors of Transport Ltd produced the following Statement of profit or loss account for 2017 and statement of financial Position as 31st December 2017 with the 2016 comparatives. Transport Ltd Statement of Profit or Loss Account for the year ended 31st December 2017 Revenue 320,000 Cost of Sales (143,000) Gross Profit 177,000 Interest received 5,000 Gain on disposal of equipment 7,000 Depreciation (39,000) Administrative and selling expenses (13,000) Operating Profit before Interest and taxes 137,000 Interest expenses (20,000) Profit before tax 117,000 Taxation (35,000) Profit after tax 82,000 Statement of financial position as at 31st December 2017 Non-current assets 2017 GHC 2016 GHC Vehicles at cost 195,000 130,000 Less: Accumulated depreciation (79,000) (52,000) 116,000 78,000 Investment 100,000 80,000 Current Assets Inventory 26,000 20,000 Trade Receivables 23,000 21,000 Cash and Cash equivalent 43,000 6,000 Total assets 308,000 205,000 EQUITY AND LIABILITIES Equity Stated Capital 152,000 120,000 Share Premium 26,000 23,000 Retained Earnings 68,000 17,000 Non-Current Liabilities 246,000 160,000 Long-Term loan 26,000 18,000 Current Liabilities Trade payables 18,000 13,000 Interest Payable 8,000 7,000 Tax Payable 10,000 7,000 Total Current Liabilities 36,000 27,000 Total Equity and Liabilities 308,000 205,000 Additional Information The dividend paid during 2017 was GHC31,000. The retained earnings increased by GHC82,000 profit of the period and decreased by the amount of the dividend GHC31,000. During 2017, the company acquired vehicles costing GHC90,000. During 2017, the company sold vehicles that had an original cost of GHC25,000 and accumulated depreciation of GHC12,000. The proceeds of sale were GHC20,000. Required:

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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Transport Ltd

Statement of Profit or Loss Account for the year ended 31st December 2017

Revenue	320,000
Cost of Sales	(143,000)
Gross Profit	177,000
Interest received	5,000
Gain on disposal of equipment	7,000
Depreciation	(39,000)
Administrative and selling expenses	(13,000)
Operating Profit before Interest and taxes	137,000
Interest expenses	(20,000)
Profit before tax	117,000
Taxation	(35,000)
Profit after tax	82,000
Statement of financial position as at 31st December 2017
Non-current assets	2017 GHC	2016 GHC
Vehicles at cost	195,000	130,000
Less: Accumulated depreciation	(79,000)	(52,000)
	116,000	78,000
Investment	100,000	80,000

Current Assets Inventory	26,000	20,000
Trade Receivables	23,000	21,000
Cash and Cash equivalent	43,000	6,000
Total assets	308,000	205,000
EQUITY AND LIABILITIES Equity Stated Capital	152,000	120,000
Share Premium	26,000	23,000
Retained Earnings	68,000	17,000
Non-Current Liabilities	246,000	160,000
Long-Term loan	26,000	18,000
Current Liabilities Trade payables	18,000	13,000
Interest Payable	8,000	7,000
Tax Payable	10,000	7,000
Total Current Liabilities	36,000	27,000
Total Equity and Liabilities	308,000	205,000
Additional Information

The dividend paid during 2017 was GHC31,000. The retained earnings increased by GHC82,000 profit of the period and decreased by the amount of the dividend GHC31,000.
During 2017, the company acquired vehicles costing GHC90,000.
During 2017, the company sold vehicles that had an original cost of GHC25,000 and accumulated depreciation of GHC12,000. The proceeds of sale were GHC20,000.

Required:

Prepare a cash flow statement using the indirect method.
Write a comment on the cash flow of the

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