Question - Mickelson Ltd manufactures golf clubs for professional golfers. Mickelson Ltd's balance sheets for the years ended 30 June 2010 and 2011 are presented below:
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Mickelson Ltd Balance Sheets as at 30 June
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2011
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2010
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ASSETS
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|
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Cash
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480,000
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-
|
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Accounts Receivable
|
180,000
|
300,000
|
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Provision for doubtful debts
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(60,000)
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(40,000)
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Property, plant and equipment
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780,000
|
600,000
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Accumulated depreciation, Property, plant and equip
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(180,000)
|
(100,000)
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Inventory
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460,000
|
260,000
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Total Assets
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1,660,000
|
1,020,000
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|
|
|
|
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LIABILITIES
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|
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Bank Overdraft
|
-
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200,000
|
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Accounts Payable
|
300,000
|
300,000
|
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Accrued Wages (Wages Payable)
|
100,000
|
80,000
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Provision for annual leave
|
40,000
|
60,000
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Loans
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300,000
|
-
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Total Liabilities
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740,000
|
640,000
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|
|
|
|
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Net Assets
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920,000
|
380,000
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|
|
|
|
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Represented by:
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|
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Shareholders' Funds
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|
|
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Share Capital
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700,000
|
100,000
|
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Revaluation Surplus
|
140,000
|
40,000
|
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Retained Profits
|
80,000
|
240,000
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Total Shareholders' Funds
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920,000
|
380,000
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The revenues and expenses of Mickelson Ltd for the year ended 30 June 2011 are as follows:
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$
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Revenue
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|
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Sales
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300,000
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Interest (no interest receivable at year end)
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20,000
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Gain on sale of property (had a carrying value of $100,000)
|
40,000
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Expenses
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|
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Cost of goods sold
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200,000
|
|
Doubtful debts expense
|
40,000
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Depreciation expense
|
100,000
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Wages expense
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100,000
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Employee entitlement (annual leave) expense
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80,000
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|
|
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Net Loss for the year
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(160,000)
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Additional information: Mickelson Ltd classifies interest expense payments as operating cash flows.
Required: Complete the Statement of Cash Flows for Mickelson Ltd for the year ended 30 June 2011, using the pro forma provided. Show all workings.