Using the financial statements and additional information below, prepare a cash flow statement for Papa Ltd for the year ended 31st December 2018 using the indirect method of calculating operating cash flow and write a brief comment on the cash flow for the period.
Using the financial statements and additional information below, prepare a
Papa Ltd
Statement of Profit or Loss Account for the year ended 31st December 2018
GHC
|
Revenue |
540,000 |
|
Cost of sales |
(155,000) |
|
Gross profit |
385,000 |
|
Investment income – interest received |
15,000 |
|
Loss on disposal of equipment |
(18,000) |
|
Depreciation |
(94,000) |
|
Administrative and selling expenses |
(25,000) |
|
Operating profit before interest |
263,000 |
|
Interest expense |
(10,000) |
|
Profit before |
253,000 |
|
Taxation |
(56,000) |
|
Profit after tax |
197,000 |
|
|
|
|
|
|
2018 |
2017 |
|
|
GHC |
GHC |
|
Non-current assets Vehicle at cost |
180,000 |
150,000 |
|
Accumulated depreciation |
(137,000) |
(60,000) |
|
|
43,000 |
90,000 |
|
Investments |
150,000 |
100,000 |
|
Current assets Inventory (stock) |
30,000 |
22,000 |
|
Trade receivables (debtors) |
92,000 |
24,000 |
|
91 days treasury bill |
59,000 |
25,000 |
|
Cash at bank |
101,000 |
25,000 |
|
|
282,000 |
96,000 |
|
Total Assets |
475,000 |
286,000 |
|
Equity & Liabilities |
|
|
|
Equity Share capital |
180,000 |
161,000 |
|
Share premium |
35,000 |
25,000 |
|
|
143,000 |
26,000 |
|
|
358,000 |
212,000 |
|
Non-current liabilities Long-term loans |
36,000 |
10,000 |
|
Current liabilities Trade payables (creditors) |
55,000 |
34,000 |
|
Interest payable |
1,000 |
11,000 |
|
Taxes payable |
25,000 |
19,000 |
|
Total Current Liabilities |
81,000 |
64,000 |
|
Total Liabilities |
117,000 |
74,000 |
|
Equity & Liabilities |
475,000 |
286,000 |
|
Additional Information |
|
|
- The dividend paid during 2018 was GHC80,000.
- During 2018, the company acquired a Vehicle costing GHC100,000.
- During 2018, the company sold a vehicle that had an original cost of GHC70,000 and accumulated depreciation of GHC17,000. The proceeds of disposal were GHC35,000.
Required:
- Prepare a cash flow statement using the indirect method of calculating operating cash flow.
Write a comment on the cash flow of the period.
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