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

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

   653  000
Profit before tax

Income tax expense

435  000

  (152  000)

Profit for the year

 

283  000

 

 

Additional information in relation to the year ended 30 June 2017:

  1. There were no cash sales during the year.
  2. Bad debts written off during the year amounted to $3 000
  3. 30-day cash deposits are used in the course of the daily cash management of the company
  4. There have been no asset revaluations during the year
  5. Disposals of plant comprised: original cost $60 000, accumulated depreciation $20 000
  6. Movements in “Investment in associate” account comprised $31 000 share of profit of associate less $14 000 dividend received
  7. Income tax expense comprises current tax payable component of $122 000 and a deferred tax liability component of $30 000

 

Required

  1. 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)
  2. 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)

  1. 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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