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| Exercise 23.13 | ||||||
| Reconstruction of ledger accounts: | ||||||
| Stock control a/c | ||||||
| Balance | 41500 | Cost of sales | 91500 | |||
| Creditors | 90800 | |||||
| Stock gain | 2800 | Balance | 43600 | |||
| 135100 | 135100 | |||||
| Creditors control a/c | ||||||
| Cash at bank | 89710 | Balance | 8520 | |||
| Discount revenue | 680 | Stock control | 90800 | |||
| Balance | 8930 | |||||
| 99320 | 99320 | |||||
| Debtors control a/c | ||||||
| Balance | 9540 | Sales returns | 4000 | |||
| Credit sales | 94000 | Cash at bank | 90370 | |||
| Discount expense | 410 | |||||
| Balance | 8760 | |||||
| 103540 | 103540 | |||||
| Prepaid insurance a/c | ||||||
| Balance | 160 | Insurance expense | 2400 | |||
| Cash at bank | 2430 | Balance | 190 | |||
| 2590 | 2590 | |||||
| Office wages a/c | ||||||
| Cash at bank | 22540 | Accrued office wages | 860 | |||
| Accrued office wages | 1120 | P&L summary | 22800 | |||
| 23660 | 23660 | |||||
| Capital a/c | ||||||
| Balance | 99120 | |||||
| Drawings | 2580 | P&L summary | 9610 | |||
| Balance | 131150 | Cash at bank | 25000 | |||
| 133730 | 133730 | |||||
| Fittings a/c | ||||||
| Balance | 13800 | Carrying cost - fittings | 4500 | |||
| Cash at bank | 7100 | Balance | 16400 | |||
| 20900 | 20900 | |||||
| Accumulated depreciation of fittings a/c | ||||||
| Carrying cost - fittings | 1600 | Balance | 5400 | |||
| Balance | 6200 | Depreciation of fittings | 2400 | |||
| 7800 | 7800 | |||||
| Carrying cost of fittings a/c | ||||||
| Fittings | 4500 | Acc. dep'n - fittings | 1600 | |||
| P&L summary | 2900 | |||||
| 4500 | 4500 | |||||
| Carrying cost of fittings sold | 2900 | Carrying cost of van sold | 6100 | |||
| Loss on sale of fittings (from P&L) | 600 | Profit on sale of van (from P&L) | 980 | |||
| Therefore fittings were sold for: | 2300 | Therefore van was sold for: | 7080 | |||
| Exercise 23.13 | ||||||
| Summary of cash flows from operating activities: | ||||||
| Receipts | ||||||
| Cash sales | 102000 | |||||
| Collections from debtors | 90370 | 192370 | ||||
| Payments | ||||||
| Creditors | 89710 | |||||
| Insurance | 2430 | |||||
| Office wages | 22540 | |||||
| Cartage inwards | 1500 | |||||
| Advertising | 2450 | |||||
| Wages and salaries - sales | 37500 | |||||
| Stationery | 2300 | |||||
| Postage and telephone | 930 | |||||
| Rates | 2100 | |||||
| Electricity | 2300 | |||||
| Maintenance expenses | 2560 | |||||
| Interest expense | 9500 | 175820 | ||||
| Domestic Curtains: Statement of cash flows for year ended 30 September 2001 | ||||||
| Cash flows from operating activities | ||||||
| Receipts | ||||||
| Receipts from customers | 192370 | |||||
| less | Payments | |||||
| Payments to suppliers and employees | 175820 | |||||
| Net cash provided by operating activities | 16550 | |||||
| Cash flows from investing activities | ||||||
| Receipts | ||||||
| Proceeds from sale of fittings | 2300 | |||||
| Proceeds from sale of van | 7080 | 9380 | ||||
| less | Payments | |||||
| Purchase of new fittings | 7100 | |||||
| Purchase of new van | 21600 | |||||
| Purchase of land | 33000 | 61700 | ||||
| Net cash used in investing activities | -52320 | |||||
| Cash flows from financing activities | ||||||
| Receipts | ||||||
| Additional capital | 25000 | |||||
| Loan - CFB Finance | 20000 | 45000 | ||||
| Payments | ||||||
| Drawings by proprietor | 2580 | |||||
| Mortgage repayments | 6000 | 8580 | ||||
| Net cash used by financing activities | 36420 | |||||
| Net increase (decrease) in cash held | 650 | |||||
| Cash held at beginning of year | 5800 | |||||
| Cash held at end of year | 6450 | |||||
| Note to support the statement of cash flows: reconciliation of cash held | ||||||
| 30-Sep-00 | 30-Sep-01 | |||||
| Cash on hand | 300 | 250 | ||||
| Cash at bank | 2100 | 3200 | ||||
| Investment account (at call) | 3400 | 3000 | ||||
| Total cash held | 5800 | 6450 | ||||
Last Updated on 8/09/02
By Susheel Chand