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