The following summarized statement of financial position relate to Track Ltd as at 30th June:Details20x720x8Shs '000'Shs '000'Shs '000'Shs '000'Non-current assets 500 650Less: Accumulated Depreciation (200) (300)Net Book Value 300 350Investments at cost 200 50 Current Assets Inventory400 00 Accounts receivable1,350 1,550 Cash and Bank100 - 1850 2,250Current Liabilities Bank Overdrafts- 60 Accounts payable650 90 Taxation230 190 Proposed dividends150 130 (1030) (110)Total Assets 1320 1,480 Capital and Reserves Called-up share capital Shs I ord. Shares 500 50Share premium A/c 150 200Statement of income balance 60 530 1320 1480 Additional Information: (i) During the year ended 30th June 20x8, some non-current assets originally costing Shs 25,000 had been sold for Shs 20,000 in cash. The accumulated depreciation on these non-current assets on 30th June 20x8 amounted to Shs 10,000. (ii) Some of the investments originally costing Shs 150,000 had been sold for cash at their book value. (iii) During the year ending 30th June 20x, the company made a 1 for 2 rights issue of 250,000 ordinary shares of Shs 1.00 at Shs 1.20 per share. Required:Prepare a Statement of cash flow of Track Ltd for the year to 30th June 20x8 using the indirect method in compliance with IAS (Revised).

A cash flow statement is a financial statement that summarises all cash inflows a company gets from…

Answered: The following summarized statement of…

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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The following summarized statement of financial position relate to Track Ltd as at 30^th June:
Details	20x7	20x8
Shs '000'	Shs '000'	Shs '000'	Shs '000'
Non-current assets		500		650
Less: Accumulated Depreciation		(200)		(300)
Net Book Value		300		350
Investments at cost		200		50

Current Assets
Inventory	400		00
Accounts receivable	1,350		1,550
Cash and Bank	100		-
		1850		2,250
Current Liabilities
Bank Overdrafts	-		60
Accounts payable	650		90
Taxation	230		190
Proposed dividends	150		130
		(1030)		(110)
Total Assets		1320		1,480

Capital and Reserves
Called-up share capital Shs I ord. Shares		500		50
Share premium A/c		150		200
Statement of income balance		60		530
		1320		1480

Additional Information:

(i) During the year ended 30^th June 20x8, some non-current assets originally costing Shs 25,000 had been sold for Shs 20,000 in cash. The accumulated depreciation on these non-current assets on 30^th June 20x8 amounted to Shs 10,000.

(ii) Some of the investments originally costing Shs 150,000 had been sold for cash at their book value.

(iii) During the year ending 30^th June 20x, the company made a 1 for 2 rights issue of 250,000 ordinary shares of Shs 1.00 at Shs 1.20 per share.

Required:

Prepare a Statement of cash flow of Track Ltd for the year to 30^th June 20x8 using the indirect method in compliance with IAS (Revised).

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