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The Mac 10 Department Store produced the following data for 2022: BALANCE SHEET AS AT DECEMBER 31, 2021 $ $ $ 2022 $ $ $ Non-Current Assets Goodwill Building Equipment COST DEPN NBV COST DEPN NBV 40,000 25,000 300,000 300,000 450,000 450,000 155,000 35,000 120,000 455,000 35,000 460,000 180,000 42,000 138,000 630,000 42,000 613,000 Long Term Investments 120,000 580,000 140,000 753,000 CURRENT ASSETS Stock 20,000 18,000 Short Term Investment 22,000 25,000 Debtors 10,000 12,000 Bank 12,500 0 Cash 3,200 67,700 1,700 647,700 56,700 809,700 EQUITY & LIABILITIES Capital & Reserves Share Capital ($1 Ord. Shares) 200,000 225,000 Share Premium 25,000 40,000 Reval. Reserve 0 150,000 General Reserves 22,500 55,000 120,000 367,500 195,000 665,000 Retained Earnings Non-Current Liabilities 10% Debenture CURRENT LIABILITIES Creditors Tax Payable Interest Payable Dividends Payable 214,700 91,200 16,500 15,000 17,000 10,000 10,000 8,500 22,000 65,500 20,000 53,500 647,700 809,700 Additional information available was: 1. The building was revalued during the year. 2. Equipment costing 25,000 for which there a provision for depreciation of 5,500 was sold for a profit of 6,000. 3. Dividends paid and proposed for the year amounted to 27,000 Required: (a). Prepare the cash flow statement for the year. (b) The Chairman of the board had expressed concern over the declining current assets, especially in the depletion of the bank balance. Using items in the cash flow statements and/or any other relevant information, explain the financial position and apparent stability of the company.

The Mac 10 Department Store produced the following data for 2022: BALANCE SHEET AS AT DECEMBER 31, 2021 $ $ $ 2022 $ $ $ Non-Current Assets Goodwill Building Equipment COST DEPN NBV COST DEPN NBV 40,000 25,000 300,000 300,000 450,000 450,000 155,000 35,000 120,000 455,000 35,000 460,000 180,000 42,000 138,000 630,000 42,000 613,000 Long Term Investments 120,000 580,000 140,000 753,000 CURRENT ASSETS Stock 20,000 18,000 Short Term Investment 22,000 25,000 Debtors 10,000 12,000 Bank 12,500 0 Cash 3,200 67,700 1,700 647,700 56,700 809,700 EQUITY & LIABILITIES Capital & Reserves Share Capital ($1 Ord. Shares) 200,000 225,000 Share Premium 25,000 40,000 Reval. Reserve 0 150,000 General Reserves 22,500 55,000 120,000 367,500 195,000 665,000 Retained Earnings Non-Current Liabilities 10% Debenture CURRENT LIABILITIES Creditors Tax Payable Interest Payable Dividends Payable 214,700 91,200 16,500 15,000 17,000 10,000 10,000 8,500 22,000 65,500 20,000 53,500 647,700 809,700 Additional information available was: 1. The building was revalued during the year. 2. Equipment costing 25,000 for which there a provision for depreciation of 5,500 was sold for a profit of 6,000. 3. Dividends paid and proposed for the year amounted to 27,000 Required: (a). Prepare the cash flow statement for the year. (b) The Chairman of the board had expressed concern over the declining current assets, especially in the depletion of the bank balance. Using items in the cash flow statements and/or any other relevant information, explain the financial position and apparent stability of the company.

FINANCIAL ACCOUNTING
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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QUESTION 2 The Mac 10 Department Store produced the following data for 2022: BALANCE SHEET AS AT DECEMBER 31, 2021 2022 $ $ $ $ $ $ Non-Current Assets Goodwill Building Equipment COST DEPN NBV COST DEPN NBV 40,000 25,000 300,000 300,000 450,000 450,000 155,000 35,000 120,000 455,000 35,000 460,000 180,000 42,000 138,000 630,000 42,000 613,000 Long Term Investments 120,000 580,000 140,000 753,000 CURRENT ASSETS Stock 20,000 18,000 Short Term Investment 22,000 25,000 Debtors 10,000 12,000 Bank 12,500 0 Cash 3,200 67,700 1,700 647,700 56,700 809,700 EQUITY & LIABILITIES Capital & Reserves Share Capital ($1 Ord. Shares) 200,000 225,000 Share Premium 25,000 40,000 Reval. Reserve 0 150,000 General Reserves 22,500 55,000 120,000 367,500 195,000 665,000 Retained Earnings Non-Current Liabilities 10% Debenture CURRENT LIABILITIES Creditors Tax Payable Interest Payable Dividends Payable 214,700 91,200 16,500 15,000 17,000 10,000 10,000 8,500 22,000 65,500 20,000 53,500 647,700 809,700 Additional information available was: 1. The building was revalued during the year. 2. Equipment costing 25,000 for which there a provision for depreciation of 5,500 was sold for a profit of 6,000. 3. Dividends paid and proposed for the year amounted to 27,000 Required: (a). Prepare the cash flow statement for the year. (b) The Chairman of the board had expressed concern over the declining current assets, especially in the depletion of the bank balance. Using items in the cash flow statements and/or any other relevant information, explain the financial position and apparent stability of the company.
Transcribed Image Text:QUESTION 2 The Mac 10 Department Store produced the following data for 2022: BALANCE SHEET AS AT DECEMBER 31, 2021 2022 $ $ $ $ $ $ Non-Current Assets Goodwill Building Equipment COST DEPN NBV COST DEPN NBV 40,000 25,000 300,000 300,000 450,000 450,000 155,000 35,000 120,000 455,000 35,000 460,000 180,000 42,000 138,000 630,000 42,000 613,000 Long Term Investments 120,000 580,000 140,000 753,000 CURRENT ASSETS Stock 20,000 18,000 Short Term Investment 22,000 25,000 Debtors 10,000 12,000 Bank 12,500 0 Cash 3,200 67,700 1,700 647,700 56,700 809,700 EQUITY & LIABILITIES Capital & Reserves Share Capital ($1 Ord. Shares) 200,000 225,000 Share Premium 25,000 40,000 Reval. Reserve 0 150,000 General Reserves 22,500 55,000 120,000 367,500 195,000 665,000 Retained Earnings Non-Current Liabilities 10% Debenture CURRENT LIABILITIES Creditors Tax Payable Interest Payable Dividends Payable 214,700 91,200 16,500 15,000 17,000 10,000 10,000 8,500 22,000 65,500 20,000 53,500 647,700 809,700 Additional information available was: 1. The building was revalued during the year. 2. Equipment costing 25,000 for which there a provision for depreciation of 5,500 was sold for a profit of 6,000. 3. Dividends paid and proposed for the year amounted to 27,000 Required: (a). Prepare the cash flow statement for the year. (b) The Chairman of the board had expressed concern over the declining current assets, especially in the depletion of the bank balance. Using items in the cash flow statements and/or any other relevant information, explain the financial position and apparent stability of the company.
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