You are the accountant for Fun Times Ltd, an Australian trampoline wholesaler. A summary of assets, liabilities and equity of Fun Times Ltd is presented below, together with details of revenue, expenses and profit for the year ended 30 June 2024:

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Question 3: Statement of cash flows (8 marks)

You are the accountant for Fun Times Ltd, an Australian trampoline wholesaler. A summary of assets, liabilities and equity of Fun Times Ltd is presented below, together with details of revenue, expenses and profit for the year ended 30 June 2024:

Assets, liabilities and equityas at 30 June 2024
20242023
$$
Assets
Cash128,000
Accounts receivable430,000300,000
Provision for doubtful debts(60,000)(40,000)
Interest receivable2,000
Plant780,000500,000
Accumulated depreciation – plant(180,000)(100,000)
Inventory220,000160,000
Liabilities
Bank overdraft20,000
Accounts payable270,000192,000
Accrued wages10,0008,000
Provision for annual leave50,00030,000
Loans150,000
Equity
Share capital250,000100,000
Revaluation surplus40,00040,000
Retained earnings550,000430,000
Revenue, expenses and profitfor the year ended 30 June 2024
2024
$
Revenue:
Sales revenue1,600,000
Interest20,000
Gain on disposal of plant30,000
Expenses:
Cost of goods sold(500,000)
Doubtful debts(30,000)
Depreciation – plant(100,000)
Wages(260,000)
Annual leave(30,000)
Interest(8,000)
Rent(40,000)
Net profit for the year682,000

Additional information:

  • The following expenses are paid as incurred: rent and interest.
  • Accruals of wages are made before payment.
  • The carrying amount of plant sold during the year was $100,000.
  • The ‘accounts payable’ account is used for inventory purchases.
  • The bank overdraft is payable on demand and forms part of cash equivalents.
  • Fun Times Ltd classifies interest received as cash flows from investing activities, and interest paid as an operating activity.

Required:

Prepare a statement of cash flows in accordance with AASB 107 for the year ended 30 June 2024, using the direct method. Show all relevant workings. Comparative figures and notes are not required. Note: you are not required to consider or account for income tax.

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