The following information relates to Ezekiel Limited for the year ended 30 June 2020. Profit and loss account for the year to 30 June 2020 K K Gross profit 253,000 Administrative expenses 83,600 Loss on sale of vehicle 3,300
Question Three
The following information relates to Ezekiel Limited for the year ended 30 June 2020.
|
|
K |
K |
|
Gross profit |
|
253,000 |
|
Administrative expenses |
83,600 |
|
|
Loss on sale of vehicle |
3,300 |
|
|
Increase in provision for doubtful debts |
1,100 |
|
|
|
38,500 |
126,500 |
|
Net profit |
|
126,500 |
|
|
|
71,500 |
|
|
|
55,000 |
|
Dividends |
|
27,500 |
|
Retained profit from the year |
|
27,500 |
|
|
2019 |
2020 |
||
|
|
K |
K |
K |
K |
|
Non-Current Assets |
|
|
|
|
|
Motor Vehicle at Cost |
|
150,000 |
|
200,000 |
|
Less depreciation |
|
75,000 |
|
100,000 |
|
|
|
75,000 |
|
100,000 |
|
Current Assets |
|
|
|
|
|
Inventory |
|
60,000 |
|
50,000 |
|
Trade receivables |
80,000 |
|
100,000 |
|
|
Less: Provision for bad and doubtful debts |
4,000 |
76,000 |
5,000 |
95,000 |
|
Cash |
|
6,000 |
|
8,000 |
|
|
|
217,000 |
|
253,000 |
|
Current Liabilities |
|
|
|
|
|
Trade payables |
60,000 |
|
53,000 |
|
|
Taxation |
52,000 |
|
65,000 |
|
|
Proposed dividend |
20,000 |
132,000 |
25,000 |
143,000 |
|
Capital and Reserves |
|
|
|
|
|
Ordinary share capital |
75,000 |
|
75,000 |
|
|
Profit and Loss account |
10,000 |
85,000 |
35,000 |
110,000 |
|
|
|
217,000 |
|
252,000 |
Additional information:
- The company purchased some new vehicles during 2020 for K75, 000.
- During 2020 the company also sold a vehicle for K12, 000 in cash. The vehicle had originally cost K25,000 and K10, 000 had been set aside for depreciation.
Required:
- Prepare a statement of
cash flows for Ezekiel Limited for the year ended 30 June 2020. - Outline what it tells the managers of Ezekiel Limited.
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