The following information is available for CANDY GH, a limited liability company: Statement of Profit or Loss and Other Comprehensive Income for the Year Ended 31st December 2016 GH¢000 Revenue 7,659 Costs of sales (5442) Gross profit 2,217 Operating expenses (1,167) Operating profit 1,050 Interest expenses (150) Operating profit before tax 900 Tax expense (420) Net profit after tax transferred to reserves 480 Statement of Financial Position as at 31st December: Non-current assets 2016 GH¢000 2015 GH¢000 Costs 2,160 1,785 accumulated depreciation (1,020) (870) Carrying value 1,140 915 Intangible assets 750 600 Investment property - 75 Total Non-current assets 1,890 1,590 Current assets Inventory 450 306 Trade receivables 1,170 945 Cash & cash equivalents 156 3 Total current assets 1,776 1,254 Total assets 3,666 2,844 Equity Equity share capital (GH¢2 par value) 1,380 1,173 Retained earnings 780 540 Total equity 2,160 1,713 Non-current liabilities 12% debentures 510 150 Current liabilities Trade payables 381 357 Bank overdraft 255 294 taxation 360 330 Total current liabilities 996 981 Total equity & liabilities 3,666 2,844 Additional information: Equipment which had cost GH¢255, 000 and with a net book value of GH¢ 135,000 and was sold for GH¢96, 000 during the year. The cash proceeds of the sale of asset investment properties amounted to GH¢90,000. Dividends paid during the year amounted to GH¢240,000. Required: Prepare the company’s statement of cash flows for the year ended 31st December 2016, using the indirect method, adopting the format in IAS 7 Statement of cash flows.

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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Statement of Profit or Loss and Other Comprehensive Income for the Year Ended 31st December 2016

	GH¢000
Revenue	7,659
Costs of sales	(5442)
Gross profit	2,217
Operating expenses	(1,167)
Operating profit	1,050
Interest expenses	(150)
Operating profit before tax	900
Tax expense	(420)
Net profit after tax transferred to reserves	480

Statement of Financial Position as at 31st December:

Non-current assets	2016 GH¢000	2015 GH¢000
Costs	2,160	1,785
accumulated depreciation	(1,020)	(870)
Carrying value	1,140	915
Intangible assets	750	600
Investment property	-	75
Total Non-current assets	1,890	1,590
Current assets
Inventory	450	306
Trade receivables	1,170	945
Cash & cash equivalents	156	3
Total current assets	1,776	1,254
Total assets	3,666	2,844
Equity
Equity share capital (GH¢2 par value)	1,380	1,173
Retained earnings	780	540
Total equity	2,160	1,713
Non-current liabilities
12% debentures	510	150
Current liabilities
Trade payables	381	357
Bank overdraft	255	294
taxation	360	330
Total current liabilities	996	981
Total equity & liabilities	3,666	2,844

Additional information:

Equipment which had cost GH¢255, 000 and with a net book value of GH¢ 135,000 and was sold for GH¢96, 000 during the year.
The cash proceeds of the sale of asset investment properties amounted to GH¢90,000.
Dividends paid during the year amounted to GH¢240,000.

Required:

Prepare the company’s statement of cash flows for the year ended 31^st December 2016, using the indirect method, adopting the format in IAS 7 Statement of cash flows.

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