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
|
2010
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ASSETS
|
|
|
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Cash
|
480,000
|
-
|
|
Accounts Receivable
|
180,000
|
300,000
|
|
Provision for doubtful debts
|
(60,000)
|
(40,000)
|
|
Property, plant and equipment
|
780,000
|
600,000
|
|
Accumulated depreciation, Property, plant and equip
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(180,000)
|
(100,000)
|
|
Inventory
|
460,000
|
260,000
|
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Total Assets
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1,660,000
|
1,020,000
|
|
|
|
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LIABILITIES
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|
|
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Bank Overdraft
|
-
|
200,000
|
|
Accounts Payable
|
300,000
|
300,000
|
|
Accrued Wages (Wages Payable)
|
100,000
|
80,000
|
|
Provision for annual leave
|
40,000
|
60,000
|
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Loans
|
300,000
|
-
|
|
Total Liabilities
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740,000
|
640,000
|
|
|
|
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Net Assets
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920,000
|
380,000
|
|
|
|
|
Represented by:
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|
|
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Shareholders' Funds
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|
|
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Share Capital
|
700,000
|
100,000
|
|
Revaluation Surplus
|
140,000
|
40,000
|
|
Retained Profits
|
80,000
|
240,000
|
|
Total Shareholders' Funds
|
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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2011
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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)
|
20,000
|
|
Gain on sale of property (had a carrying value of $100,000)
|
40,000
|
|
Expenses
|
|
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Cost of goods sold
|
200,000
|
|
Doubtful debts expense
|
40,000
|
|
Depreciation expense
|
100,000
|
|
Wages expense
|
100,000
|
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Employee entitlement (annual leave) expense
|
80,000
|
|
|
|
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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: Calculate the cash flow from operating activities section of Mickelson Ltd's Statement of Cash Flows for the year ended 30 June 2011.