Accounting Assignment Covering Cash Flow Statement and Statement of Comprehensive Income

QUESTION ONE [25]

Prepare the indirect cash flow statement for the financial year ended 30 June 2023 for Bibby Limited based on the following financial information provided:

Statement of Financial Position as at 30 June 2023
Assets	2023	2022
Non-current assets
Property, Plant and Equipment	2 485 000	2 398 000
Current assets
Inventory	1 279 000	985 300
Accounts receivable	412 000	535 000
Cash and Cash equivalents	531 300	367 700
	2 222 300	1 888 000
Total assets	4 707 300	4 286 000
Equity and liabilities
Equity
Share capital	2 650 000	2 150 000
Retained income	1 248 000	745 000
	3 898 000	2 895 000
Non-current liabilities
Loan 9%	456 000	980 000
Current liabilities
Accounts payable	97 800	51 000
Taxes SARS	154 000	162 000
Shareholders for dividends	101 500	198 000
	353 300	411 000
Total equity and liabilities	4 707 300	4 286 000

Statement of Comprehensive Income for the year ended 30 June 2023
	2023	2022
Sales	5 240 000	4 985 000
Cost of sales	(2 354 000)	(1 358 000)
Gross profit	2 886 000	3 627 000
Distribution, Administration and other expenses	(2 114 439)	(1 767 000)
Operating expenses	1 943 439	1 598 500
Depreciation	171 000	168 500
Operating profit	771 561	1 860 000
Interest on loan	(72 950)	(158 000)
Profit before tax	698 611	1 702 000
Tax	(195 611)	(476 560)
Profit after tax	503 000	1 225 440

QUESTION TWO [35]

The trial balance of Nixit Ltd was prepared by the junior bookkeeper for the financial year ended 31 August 2023.

Account	Debit	Credit
Municipal charges	26 800
Telephone and communication	23 400
Rental expenses	39 000
Credit losses	1 500
Interest received		14 400
Consulting charges		495 000
Sale of goods		1 548 000
Cost of sales	630 000
Printing and stationery	22 800
Director fees	28 000
Salaries and wages	215 000
Interest on loan	12 000
Penalties and fines	1 500
Cleaning fees	6 400
Computer expenses	4 800
Capital		110 000
Retained income		25 800
Creditors control		52 000
Computer equipment	198 000
Accumulated depreciation on computer equipment		59 800
Investment property	376 100
Debtors control	148 000
Allowance for credit losses		23 000
Inventory: Raw material	54 800
Inventory: Stationery	14 000
Motor vehicles	250 000

Accumulated depreciation on motor vehicles		34 000
Office equipment	159 000
Accumulated depreciation on office equipment		41 500
10% Loan		160 000
Investment	185 000
Cheque account: FNB	167 400
	2 563 500	2 563 500

Additional information:

Depreciation has not been recorded on property, plant and equipment. Motor vehicles are depreciated on the reducing balance method at 20%. Computer equipment of R85 000 was purchased on 1 February 2023, replacing older items initially purchased for R48 000 on 1 November 2019. Office equipment of R27 000 was purchased on 31 December 2022. Computer equipment and office equipment depreciates on the straight-line basis at 25% and 10% respectively.
Mr. Roy returned faulty goods of R8 100. Nixit Traders applies a 50% markup on finished products.
The company allows a 2,5% discount for accounts settled within 30 days. Mrs. Redkin purchased goods of R58 000 on a 30-day account on 1 August 2023. The account was paid on 27 August 2023, but the bookkeeper neglected to record the discount in all affected accounts.
The water and electricity account of R1 500 was received on 21 September 2023.
Artwork of R2 500 was donated to Nixit Limited but not recorded.
Professional work completed but not yet invoiced at year-end amounts to R5 000.
A delivery truck was purchased on 1 December 2022 for R120 000 with an estimated residual value of R35 000. No vehicles were sold during the year.
Rental for September 2023 was paid on 12 August 2023.
The company is taxed at 28%.

Required:

Prepare the Statement of Comprehensive Income of Nixit Limited for the year ended 31 August 2023. Detail all calculations.

QUESTION THREE [10]

Using a flow chart illustrate the accounting process.

Accounting Assignment Answers: Expert Answers on Above Questions

The indirect cash flow statement for the financial year ended 30 June 2023 for Bibby Limited based on the following financial information provided is prepared as follows:

To prepare the cash flow statement, it is important to calculate cash flow from operating activities, financing activities and investing activities and these are calculated as follows:

Cash flow from operating activities:

Profit before tax R698611
Add: Depreciation R171000
Interest on loan R72950
Operating profit R942561

Changes in Inventory R293700
Changes in accounts receivables (R123000)
Changes in accounts payable R46800
Net change in working capital R123900
Cash generated from operations R818661
Less: Interest and tax R276561
Cash flow from operating activities R542100

Similarly cash flow from financing activities and investing activities is calculated below.

Disclaimer: This answer is a model for study and reference purposes only. Please do not submit it as your own work.

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Accounting Assignment Covering Cash Flow Statement and Statement of Comprehensive Income

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