You have been given the following information relating to a limited liability company. This company is preparing financial statements for the year ended 31 December 2014.
| $ | $ | |
| 2014 | 2013 | |
| COST | 34,440 | 24,600 |
| ACC DEPRECIATION | 20,664 | 12,300 |
| CARRYING VALUE | 13,776 | 12,300 |
| REVALUATION SURPLUS | 24,450 | 24,150 |
Additional information
1. During the year non-current assets which had cost $8,610, with a carrying value of $4,133 were sold for $5,166.
2. The revaluation surplus arose from the revaluation of some land that was not being depreciated.
Required.
Prepare investing cash flows for the year ended 31 December 2014 .
Suggested Solutions
First work out Depreciation expenses for the year
Accumuated Depreciation Account
| $ | $ | ||
| Opening balance | 12,300 | ||
| Acc depreciation for the item sold | 4,477 | ||
| Depreciation expenses for the year | ??? | ||
| Closing Balance | 20,664 |
Solve it, and depreciation expenses = $12,841
Carrying value of assets
| $ | $ | ||
| Opening balance | 12,300 | ||
| carrying value of disposed asset | 4,133 | ||
| Revaluation surplus | 300 | ||
| Depreciation expenses for the year | 12,841 | ||
| Purchase (Additonal) | ??? | ||
| Closing Balance | 13,776 |
Solve it, and Purchase = $18,150
Investing Cash flows
| $ | |
| Purchase (Additional asset) Outflow | (18,150) |
| Proceed from disposal Inflow | 5,166 |
| Total Investing activities (outflow) | (12,984) |
To do the same topic again in ACCA F3 prepare investing cash flows