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1、Financial Accounting 2Suggested solutions 3 1LESSON 3 Suggested solutionsQuestion 1 (32 marks)Computer solutiona. (18 marks)Statement of Financial Position20X04 RefDRRefCr20X5CheckProperty, plant & equipment6,600,000n. 400,000 c. 500,000 6,500,0000 Accumulated depreciation2,600,000c.300,000 g.400,00
2、0 2,700,0000 Inventories300,000e.1,380,000 d.1,440,000240,0000 Accounts receivable480,000a.3,600,000 b.3,580,000500,0000 Certificates of deposit18,000s.12,00030,0000 Cash20,000s.22,00042,0000 Accumulated Profits910,000r.150,000 q.320,000 1,080,0000 Ordinary shares2,000,000n.300,000 2,550,0000 o.250,
3、000 Notes payable1,500,000o.250,000 n.100,000600,0000 p.750,000 Income tax payable12,000l.210,000 h213,00015,0000 Interest payable16,000k.74,000 j.65,0007,0000 Accounts payable380,000f.1,400,000 e.1,380,000360,0000Statement of Comprehensive Income Sales a.3 600,000 Gain on sale of plant& equipmentc.
4、50,000 Cost of goods soldd.1,440,000 Deprciation expenseg.400,000 Income tax expenseh213,000 Interest expensej.65,000 Other expensesm1,212,000 Profitq.320,000Statement of Cash Flows Operating Cash Flows Collections from customersb.3,580,000 Cash paid to suppliersf.1,400,000 Income tax paidl.210,000
5、Interest paidk.74,000 Other expenses paidm1,212,000Financial Accounting 2Suggested solutions 3 2Investing Cash Flows Proceeds Property, plant & equipment soldc.250,000 Financing Cash Flows Payment of notes payablep.750,000 Dividends paidr.150,000 Net increase in cashs.34,000 Total (check)16,028 0001
6、6,028,000b. (10 marks)HAYDEN LTD. Statement of Cash Flows for the year ending December 31, 20X5Cash flows from operating activities Cash receipts from customers 3,580,000 Cash paid to suppliers1,400,000 Cash paid for other operating expenses1,212,000 Cash generated from operations968,000 Interest pa
7、id74,000 Income taxes paid210,000 Net cash from operating activities 684,000Cash flows from investing activities Proceeds from sale of plant & equipment 250,000 Net cash from investing activities250,000Cash flows from financing activities Payment of notes payable750,000 Dividends paid150,000 Net cas
8、h from financing activities900,000Net decrease in cash & cash equivalents34,000 Cash & cash equivalents, January 1, 20X538,000 Cash & cash equivalents, December 31, 20X572,000Requirement 2 (4 marks)Note to the financial statementsNon-cash financing and investing activities:1. During the year the com
9、pany purchased property, plant & equipment with a value of 400,000 by issuing a note payable for 100,000 and ordinary shares for the remainder. 2. During the year the company converted 250,000 of notes payable to equity.Financial Accounting 2Suggested solutions 3 3Question 2 (19 marks 9 for spreadsh
10、eet and 10 for statement)20X4RefDRRefCR20X5 Statement of Financial PositionProperty, plant & equipment6,600,0006,500,000Accumulated depreciation2,600,000(c)400,0002,700,000 Inventories300,000(g)60,000240,000 Accounts receivable480,000(f)20,000500,000 Certificates of deposit18,00030,000 Cash 20,00042
11、,000 Accumulated profits910,000(a)320,0001,080,000 Ordinary shares2,000,0002,550,000 Notes payable1,500,000600,000 Income tax payable12,000(j)3,00015,000 Interest payable16,000(i)9,0007,000 Accounts payable380,000(h)20,000360,000Statement of Cash FlowsInflowsOutflows Operating cash flows (OCF) Profi
12、t(a)320,000 Adjustments for: Non cash transactions Gain on sale of plant & equipment(b)50,000Depreciation expense(c)400,000 Separate disclosure items Income tax expense(d)213,000 Interest expense(e)65,000 Changes in working capital accounts Increase in accounts receivable(f)20,000Decrease in invento
13、ries(g)60,000Decrease in accounts payable(h)20,000 Income tax paid(j)3,000(d)213,000 Interest paid(e) (i)65,000 9,000Financial Accounting 2Suggested solutions 3 4Note that only transactions relating to the cash flow from operating activities section of the spreadsheet have been considered.HAYDEN LTD
14、. Statement of Cash Flows for the year ending December 31, 20X5Cash flows from operating activities Profit 320,000 Adjustments for: Gain on sale of plant & equipment50,000 Depreciation expense400,000 Interest expense65,000 Income tax expense213,000 Operating profit before working capital changes948,
15、000 Increase in accounts receivable20,000 Increase in inventory60,000 Decrease in accounts payable20,000 Cash generated from operations968,000 Income tax paid 210,000 Interest paid74,000 Net cash from operating activities 684,000Question 3 (20 marks)Multiple choice (1 mark each)a.4)b. 3) This is a n
16、on-cash transaction which would not be included in the statement of cash flows but would be included in the notes to the financial statements.c.1)d. 4)e.4)Note that it could be shown elsewhere as well. This is the most common placement.f.3)g. 1)h. 3)Financial Accounting 2Suggested solutions 3 5(2 marks each)i.2)Profit 20,000 + 30,000 = Cash flow from operating activities. Therefore profit is 10,000 lower than cash flow from operati
