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Assignment 7 Cash Flow Statement Solutions

The document presents the comparative financial statements of Los&co Company for the years 2014 and 2015, including a statement of financial position and an income statement. It highlights key figures such as total assets of €131,000 in 2015, a profit for the year of €32,000, and a statement of cash flows indicating a net increase in cash of €17,000. Additional details include changes in equity, liabilities, and cash flow activities.

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2 views

Assignment 7 Cash Flow Statement Solutions

The document presents the comparative financial statements of Los&co Company for the years 2014 and 2015, including a statement of financial position and an income statement. It highlights key figures such as total assets of €131,000 in 2015, a profit for the year of €32,000, and a statement of cash flows indicating a net increase in cash of €17,000. Additional details include changes in equity, liabilities, and cash flow activities.

Uploaded by

atung9170
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment 7

Los&co Company’s comparative statements of financial position and the income statement
are presented blow.

Statement of financial position as at 31 December


2015 2014
ASSETS € €
Non-current assets
Property, plant and equipement
Equipment 60.000 78.000
Depreciation - equipment (29.000) (24.000)
31.000 54.000

Current assets
Inventories 30.000 20.000
Trade receivables 33.000 14.000
Cash 37.000 20.000
100.000 54.000
Total assets 131.000 108.000

EQUITY AND LIABILITIES


Equity
Share capital-ordinary 18.000 14.000
Retained earnings 50.000 38.000
68.000 52.000
Non-current liabilities
bonds payables 27.000 33.000
current liabilities
trades payable 29.000 15.000
income tax payable 7.000 8.000
36.000 23.000
total equity and liabilities 131.000 75.000
Income Statement 2015 €

Sales revenue 242.000


cost of sales 175.000
gross profit 67.000
operating expenses 24.000
Income from operations 43.000
Interest expense 3.000
income before income taxes 40.000
income tax expense 8.000
profit for the year 32.000

Additional information:
1. Depreciation expense is €13.300.
2. Dividends declared and paid were €20.000.
3. During the year, equipment was sold for €9.700. This equipment cost €18.000
originally and had accumulated depreciation of €8.300 at the time of sale.

Required
Prepare a statement of cash flows for 2015 using the indirect method.
Solutions

statement of Cash Flows for the Year Ended December 31, 2015

Cash flows from operating activities € €


Net income 32.000
Adjustments to reconcile net income to net cash
provided by operating activites:
Depreciation expense 13.300
Increase in trade receivables (19.000)
Increase in inventory (10.000)
Increase in trade payables 14.000
Decrease in income tax payable (1.000)
(2.700)
Net cash provided by operating activities 29.300
Cash flow from investing activities
sale of equipment 9.700
Cash flow from financing activities
redemption of bond (6.000)
issuance of ordinary shares 4.000
payment of dividends (20.000)
Net cash used by financing activities (22.000)

Net increase in cash 17.000


Cash at beginning of period 20.000
Cash at end of period 37.000

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