QUESTION ONE [25] Prepare the indirect cashflow 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-currentassets | ||
| Property,Plant and Equipment | 2 485000 | 2398 000 |
| Current assets | ||
| Inventory | 1 279000 | 985300 |
| Accounts receivable | 412 000 | 535000 |
| Cash and Cash equivalents | 531 300 | 367700 |
| 2 222300 | 1888 000 | |
| Total assets | 4 707300 | 4286 000 |
|
Equity and liabilities |
||
| Equity | ||
| Share capital | 2 650000 | 2150 000 |
| Retained income | 1 248000 | 745000 |
| 3 898000 | 2895 000 | |
|
Non-current liabilities |
||
| Loan9% | 456 000 | 980000 |
| Current liabilities | ||
| Accounts payable | 97800 | 51 000 |
| Taxes SARS | 154 000 | 162000 |
| Shareholders for dividends | 101 500 | 198000 |
| 353 300 | 411000 | |
| Total equity and liabilities | 4 707300 | 4286 000 |
| Statement of Comprehensive Income for the year ended 30 June 2023 | ||
| 2023 | 2022 | |
| Sales | 5240 000 | 4985 000 |
| Costof sales | (2 354000) | (1 358000) |
| Gross profit | 2886 000 | 3627 000 |
| Distribution,Administration and other expenses | (2 114439) | (1 767000) |
| Operatingexpenses | 1943 439 | 1598 500 |
| Depreciation | 171000 | 168500 |
| Operatingprofit | 771561 | 1860 000 |
| Interestonloan | (72950) | (158000) |
| Profit before tax | 698611 | 1702 000 |
| Tax | (195611) | (476560) |
| Profit after tax | 503000 | 1225 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 | 26800 | |
| Telephone and communication | 23400 | |
| Rental expenses | 39000 | |
| Credit losses | 1500 | |
| Interest received | 14400 | |
| Consulting charges | 495 000 | |
| Sale of goods | 1 548000 | |
| Cost of sales | 630 000 | |
| Printing and stationery | 22800 | |
| Director fees | 28000 | |
| Salaries and wages | 215 000 | |
| Interest on loan | 12000 | |
| Penalties and fines | 1500 | |
| Cleaning fees | 6400 | |
| Computer expenses | 4800 | |
| Capital | 110 000 | |
| Retained income | 25800 | |
| Creditors control | 52000 | |
| Computer equipment | 198 000 | |
| Accumulated depreciation on computer equipment |
59800 |
|
| Investment property | 376 100 | |
| Debtors control | 148 000 | |
| Allowance for creditlosses | 23000 | |
| Inventory:Rawmaterial | 54800 | |
| Inventory: Stationery | 14000 | |
| Motor vehicles | 250 000 |
| Accumulated depreciation on motor vehicles | 34000 | |
| Office equipment | 159 000 | |
| Accumulated depreciation on office equipment | 41500 | |
| 10% Loan | 160 000 | |
| Investment | 185 000 | |
| Cheque account: FNB | 167 400 | |
| 2563500 | 2 563500 |
Additional information:
(a) 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.
(b) Mr. Roy returned faulty goods of R8 100. Nixit Traders applies a 50% markup on finished products.
(c) 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.
(d) The water and electricity account of R1 500 was received on 21 September 2023. (e) Artwork of R2 500 was donated to Nixit Limited but not recorded.
(f) Professional work completed but not yet invoiced at year-end amounts to R5 000.
(g) 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.
(h) Rental for September 2023 was paid on 12 August 2023. (i) 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.
Answers to Above Questions on Financial Statement
Answer 1: The indirect cashflow statement for the financial year ended 30 June 2023 for Bibby Limited based on the following financial information provided is calculated as follows:
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