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o/b
sales
Accounts Payable
DR
CASH
c/b
1,059
87
1,146
CR
51 o/b
1,095
o/b
Inventory
DR
o/b
purchases
190
1,095
1,146
1,285
CR
1,110 COGS
175
1,285
c/b
c/b
75
15
90
CR
23 o/b
67 Exp.
90
Note: Insurance Expense in the Income statement is = cash paid for insurance ($9,000) as
there are no prepaid insurance or insurance payable accounts in the balance sheet.
1
Part (b) Calculate Cash Flows from Investing and show all workings (6 marks)
$000
42
77
(45)
(53)
(50)
$(29)
WORKINGS
Land
Buildings
DR
o/b
Revalue
Purchase
CR
149
30
53
232
60
172
232
DR
c/b
DR 42,000
DR 18,000
CR
60,000
Cash
Acc. Depreciation
Gain on Sale of Buildings
Buildings
DR 77,000
DR 43,000
CR
CR
31,000
89,000
Revaluation Reserve
DR
CR
17
15
32
47
30
47
225
Purchase
50
275
Sale
Cash
Loss on Disposal
Land
(Bonus
Issue)
c/b
o/b
CR
89 Sale
186
275
c/b
Investments
DR
o/b
Land
o/b
Purchases
CR
169
45
214
214
214
c/b
Part (c) Calculate Cash Flows from Financing and show all workings (9 marks)
$000
75
56
(11)
(150)
(12)
(15)
$(57)
WORKINGS
c/b
Mortgage debenture
DR
CR
0
75
75
75
75
Share Capital
DR
o/b
Cash
Revaluation Reserve
DR
CR
17
(Bonus
Issue)
c/b
15
32
47
30
c/b
CR
o/b
(Share issue)
(Bonus issue)
420
56
15
491
491
491
o/b
Land
47
Bonds Payable
DR
CASH
c/b
CR
259 o/b
150
109
259
259
General Reserve
DR
c/b
CR
29 o/b
49 RE
78
78
78
(d) Consider this independent case and calculate cash flows from investing activities:
Cash received for sale of building $200,000 = Investing cash inflow
Sale of building journal entry:
DR
DR
CR
CR
Cash
Acc. Depn Building
Gain on sale of Building
Building
200,000
650,000
10,000
840,000
T-accounts in $ millions:
DR
o/b
Purchases of
assets
1.44
8.1
0.975
3.325
3.975
3.975
Dep
exp.
c/b
c/b
8.94
0.65
o/b
8.94
Answer:
Cash flows from investing activities:
Proceeds on sale of building
$ 200,000
(1,440,000)
($1,240,000)