Question

The financial statements for Waverley Ltd are provided below:

Waverley Ltd

Comparative Balance Sheet

As at 30 June 2019 and 2020

	2019	2020
Assets
Cash At Bank	167,000	215,000
Accounts Receivable	213,000	158,000
Inventory	68,000	73,000
Prepaid Rent	4,000	5,000
Buildings	320,000	350,000
Accumulated Depreciation – Buildings	(108,000)	(132,000)
Equipment	67,000	78,000
Accumulated Depreciation – Equipment	(25,000)	(26,000)
	706,000	721,000
Liabilities
Accounts Payable	236,000	228,000
Dividend Payable	12,000	13,000
Salary Payable	18,000	20,000
Tax Payable	16,000	17,000
Bank Loan	158,000	171,000
	440,000	449,000
Equity
Capital	170,000	164,000
Retained Earnings	96,000	108,000
	266,000	272,000

Waverley Ltd

Income Statement

For the Year Ended at 30 June 2020

Sales		1,000,000
COGS		(450,000)
Gross Profit		550,000
Profit on sale of Equipment		2,000
Rent	42,000
Salary	400,000
Interest	12,000
Depreciation Expense – Buildings	13,000
Depreciation Expense – Equipment	15,000
		(482,000)
Net Profit before Tax		70,000
Less Taxation expense		(21,000)
Net Profit		49,000

Required:

Prepare an extract of the Cash Flow Statement for the year ended 30 June 2020 showing Cash Flows from Operating Activities AND Cash Flows from Financing Activities. Show all workings.

Answer 1