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 | 86,100 | 61,500 |
| ACC DEPRECIATION | 51,660 | 30,750 |
| CARRYING VALUE | 34,440 | 30,750 |
| REVALUATION SURPLUS | 7,950 | 6,900 |
Additional information
1. During the year non-current assets which had cost $6,150, with a carrying value of $2,952 were sold for $3,690.
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 | 30,750 | ||
| Acc depreciation for the item sold | 3,198 | ||
| Depreciation expenses for the year | ??? | ||
| Closing Balance | 51,660 |
Solve it, and depreciation expenses = $24,108
Carrying value of assets
| $ | $ | ||
| Opening balance | 30,750 | ||
| carrying value of disposed asset | 2,952 | ||
| Revaluation surplus | 1,050 | ||
| Depreciation expenses for the year | 24,108 | ||
| Purchase (Additonal) | ??? | ||
| Closing Balance | 34,440 |
Solve it, and Purchase = $29,700
Investing Cash flows
| $ | |
| Purchase (Additional asset) Outflow | (29,700) |
| Proceed from disposal Inflow | 3,690 |
| Total Investing activities (outflow) | (26,010) |
To do the same topic again in ACCA F3 prepare investing cash flows