- 20 Marks
FA – L1 – Q98 – Statement of cash flows
Prepare a statement of cash flows for Tango Limited for 20X9 using the direct method, based on provided financial statements.
Question
The following information has been extracted from the financial statements of Tango Limited for the year ended 31 December 20X9.
Statement of profit or loss for the year ended 31 December 20X9
| GH¢ | GH¢ |
|---|---|
| Sales | |
| Cost of sales | |
| Gross profit | |
| Loss on disposal of non-current asset | (4,000) |
| Wages and salaries | (137,000) |
| Other expenses (including depreciation GH¢46,000) | (193,000) |
| Interest charges | (19,000) |
| Profit before tax | |
| Tax on profit | |
| Profit after tax |
The asset disposed of had a carrying amount of GH¢31,000 at the time of the sale.
Extracts from the statements of financial position:
| At 1 January 20X9 | At 31 December 20X9 | |
|---|---|---|
| GH¢ | GH¢ | |
| Non-current assets | 157,000 | 142,000 |
| Inventory | 42,000 | 45,000 |
| Receivables | 43,600 | 51,000 |
| Cash and cash equivalents | 4,000 | 11,200 |
| Trade payables | 45,000 | 41,000 |
| Taxation payable | 10,000 | 12,000 |
| Interest payable | 3,000 | 2,000 |
Note on non-current assets
| Land and buildings | Machinery | Fixtures & fittings | Total | |
|---|---|---|---|---|
| GH¢000 | GH¢000 | GH¢000 | GH¢000 | |
| Cost or valuation | ||||
| At 31 December 20X8 | 830 | 470 | 197 | 1,497 |
| Additions | – | 43 | 55 | 98 |
| Disposals | – | (18) | – | (18) |
| Adjustment on revaluation | 70 | – | – | 70 |
| At 31 December 20X9 | 900 | 495 | 252 | 1,647 |
| Depreciation | ||||
| At 31 December 20X8 | (90) | (270) | (180) | (540) |
| Charge for the year | (10) | (56) | (8) | (74) |
| Disposals | – | 12 | – | 12 |
| Adjustment on revaluation | 100 | – | – | 100 |
| At 31 December 20X9 | 0 | (314) | (188) | (502) |
| Carrying amount: | ||||
| At 31 December 20X8 | 740 | 200 | 17 | 957 |
| At 31 December 20X9 | 900 | 181 | 64 | 1,145 |
You have been informed that included within distribution costs is GH¢4,000 relating to the loss on a disposal of a non-current asset.
Required
Prepare a statement of cash flows for Tango Limited for the year ended 31 December 20X9.
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