ACCT2005 Techniques in Financial Accounting

Topic 9: Preparation of cash flows (Module 9)

Week 11 In-Class Exercise

Exercise 18.14
Some of the most recent financial statements for Hyland Pty Ltd are shown below.

HYLAND PTY LTD

Comparative statements of financial position
As at 30 June
2023 2024
Assets
Cash at bank – $36,000
Accounts receivable $56,000 68,000
Inventory 192,000 224,000
Sales equipment 120,000 144,000
Accumulated depreciation – sales equipment (36,000) (60,000)
Land 160,000 80,000
Buildings 240,000 240,000
Accumulated depreciation – buildings (12,000) (20,000)
$720,000 $712,000
Liabilities and equity
Accounts payable 96,000 104,000
Bank overdraft 40,000 -
Equity 584,000 608,000
$720,000 $720,000

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 HYLAND PTY LTD
Statement of financial performance
As at 30 June

Sales revenue $360,000

Expenses
Cost of sales:
Beginning inventory $192,000
Purchases 224,000
416,000
Ending inventory 224,000 $192,000
Depreciation – sales equipment 28,000
Depreciation – buildings 8,000
Other expenses (paid in cash) 80,000
Loss on sale of land 16,000
Loss on sales of equipment 12,000 336,000
Profit $24,000

Additional information
1. All purchases and sales of inventories are on credit.
2. On 1 July 2023, the shareholders injected a further capital contribution of $28,000 cash
into the business.
3. During the year, sales equipment costing $24,000 and written down to a carrying
amount of $20,000 was sold for $8,000 cash.
4. Half of the land on hand at the beginning of the year was sold for $64,000 cash.
5. During the year, the company withdrew cash from the business bank account in order
to pay cash dividends to its shareholders.
6. The bank overdraft in the company is considered to be an integral part of the
company’s cash management arrangements.
7. Ignore income tax.

Required
Prepare the statement of cash flows for Hyland Pty Ltd for the year ended 30 June 2024,
using the direct method.

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 HYLAND PTY LTD
Statement of Cash Flows
for the year ended 30 June 2024

Cash flows from operating activities:

? $
? $
Cash generated from operations $
Net cash from operating activities $

Cash flows from investing activities:

? $
? $
? $

Cash flows from financing activities:

? $
? $
? $

Net increase (decrease) in cash and $

cash equivalents
? $

? $

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Workings:

Cash flows from operating activities

Cash receipts from customers:

Accounts Receivable
Balance b/d
Balance c/d

Cash paid to suppliers:

Accounts Payable
Balance b/d 96,000
Balance c/d 104,000

Cash paid to suppliers and employees =

Cash flows from investing activities

Purchase of property and equipment:

Sales Equipment
Balance b/d 120,000

Balance c/d 144,000

Cash flows from financing activities

Dividends paid:
Equity
Balance b/d 584,000
Balance c/d 608,000

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