The comparative statement of financial position and statement of profit or loss of HUSKY Ltd for the year ended 30 June 2017 are as follows:
| HUSKY Ltd
Statement of Financial Position as at 30 June 2017 |
|||
| 2017 | 2016 | ||
| Current assets | |||
| Cash at bank | $ 402 000 | $ 70 000 | |
| Cash deposits (30-day) | 80 000 | 30 000 | |
| Accounts receivable | 181 000 | 75 000 | |
| Allowance for doubtful debts | (10 000) | (5 000) | |
| Interest receivable | 5 000 | 3 000 | |
| Inventories | 146 000 | 200 000 | |
| Prepayments | 4 000 | 7 000 | |
| 808 000 | 380 000 | ||
| Non-current assets | |||
| Land | 120 000 | 100 000 | |
| Plant | 710 000 | 600 000 | |
| Accumulated depreciation | (190 000) | (140 000) | |
| Investment in associate | 97 000 | 80 000 | |
| Brand names | 90 000 | 120 000 | |
| 827 000 | 760 000 | ||
| Total assets | $ 1635 000 | $ 1 140 000 | |
| Current liabilities | |||
| Accounts payable | $ 206 000 | $ 180 000 | |
| Interest payable | 21 000 | 12 000 | |
| Current tax payable | 122 000 | 40 000 | |
| 349 000 | 232 000 | ||
| Non-current liabilities | |||
| Borrowings | 138 000 | 98 000 | |
| Deferred tax liability | 65 000 | 35 000 | |
| Provision for employee benefits | 35 000 | 20 000 | |
| 238 000 | 153 000 | ||
| Total liabilities | 587 000 | 385 000 | |
| Equity | |||
| Share capital | 550 000 | 500 000 | |
| Retained earnings | 498 000 | 255 000 | |
| 1 048 000 | 755 000 | ||
| Total liabilities and equity | $ 1 635 000 | $ 1140 000 | |
| HUSKY Ltd
Statement of Profit or Loss for the year ended 30 June 2017 |
|||||
| Sales
Sales Discount Cost of sales |
$ 2 380 000
(8 000) (1 330 000) |
||||
| Gross profit
Interest Share of profits of associate Gain on sale of plant |
1 042 000
3 000 31 000 12 000 |
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| Total income | 1 088 000 | ||||
| Expenses
Salaries and wages Depreciation Doubtful debts Interest Other (including impairment of patents $30 000) |
$ 468 000 70 000 8 000 24 000 83 000 |
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| 653 000 | |||||
| Profit before tax
Income tax expense |
435 000
(152 000) |
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| Profit for the year
|
283 000
|
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Additional information in relation to the year ended 30 June 2017:
- There were no cash sales during the year.
- Bad debts written off during the year amounted to $3 000
- 30-day cash deposits are used in the course of the daily cash management of the company
- There have been no asset revaluations during the year
- Disposals of plant comprised: original cost $60 000, accumulated depreciation $20 000
- Movements in “Investment in associate” account comprised $31 000 share of profit of associate less $14 000 dividend received
- Income tax expense comprises current tax payable component of $122 000 and a deferred tax liability component of $30 000
Required
- Prepare working papers showing separately all calculations to determine cash flows from each of the operating, investing and financing activities required to be disclosed under AASB 107 using the direct method. Use of T accounts or equations is acceptable; (15 Marks)
- Prepare the Statement of Cash Flows for HUSKY Ltd for the year ending 30 June 2017 in accordance with AASB 107. Comparatives are not required
(7 marks)
- Provide a reconciliation of net profit after tax with net cash provided by operating activities in accordance with AASB 1054. (8 marks)
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