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University of Ballarat — Cash Flow Tutorial

To complete our knowledge of accounting principles we will calculate the cash how of ’Class Exercise Pty Ltd’, using their Income Statement and Balance Sheet.

To get a feel for the problem, how much did Class Exercise Pty Ltd pay off their bank loan. How much dividend did they pay?

Over the page we re-construct the T accounts to see where the cash came from, and where it went.

Class Exercise Ry Ltd

Balance Sheet Summary as at 30 June 2006

  


2006


2005

 

Cash


55,200


73,800

 

Debtors


94,000


98,000

 

Inventory


107,300


112,400

 

Plant and   Equipment


149,000


102,300

 

Accumulated   Depn (P&E)


(46,000)


(48,000)

 


359,500


338,500

 

Accounts   Payable


41,000


56,000

 

Accrued   Expenses


28,200


5,500

 

Income tax   Payable


18,000


15,000

 

Bank Loan


90,000


115,000

 

Paid Up   Capital


100,000


80,000

 

Retained   Earnings


82,300


67,000

 


359,500


338,500

 

Summary Income Statement 2005/06

 

Sales


384,000


 

Less COGS


198,000 


 

Gross   Profit on Sales



186,000

 

Proceeds on   Sale of Eqpt


16,000


 

Less BV of Eqpt Sold


7,000 


 

Profit on Sale of Eqpt



9,000 

 

Gross Profit



195,000

 

less expenses

Depreciation


11,000


 

Interest


9,200


 

Other Expenses


119,000


139,200 

 

Profit   before tax



55,800

 

Income Tax Expense



18,000

 

Profit after tax



37,800

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