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 | 154,980 | 110,700 |
| ACC DEPRECIATION | 92,988 | 55,350 |
| CARRYING VALUE | 61,992 | 55,350 |
| REVALUATION SURPLUS | 3,750 | 3,450 |
Additional information
1. During the year non-current assets which had cost $9,840, with a carrying value of $4,723 were sold for $5,904.
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 | 55,350 | ||
| Acc depreciation for the item sold | 5,117 | ||
| Depreciation expenses for the year | ??? | ||
| Closing Balance | 92,988 |
Solve it, and depreciation expenses = $42,755
Carrying value of assets
| $ | $ | ||
| Opening balance | 55,350 | ||
| carrying value of disposed asset | 4,723 | ||
| Revaluation surplus | 300 | ||
| Depreciation expenses for the year | 42,755 | ||
| Purchase (Additonal) | ??? | ||
| Closing Balance | 61,992 |
Solve it, and Purchase = $53,820
Investing Cash flows
| $ | |
| Purchase (Additional asset) Outflow | (53,820) |
| Proceed from disposal Inflow | 5,904 |
| Total Investing activities (outflow) | (47,916) |
To do the same topic again in ACCA F3 prepare investing cash flows