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 | 17,220 | 12,300 |
| ACC DEPRECIATION | 10,332 | 6,150 |
| CARRYING VALUE | 6,888 | 6,150 |
| REVALUATION SURPLUS | 17,700 | 17,250 |
Additional information
1. During the year non-current assets which had cost $4,920, with a carrying value of $2,362 were sold for $2,952.
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 | 6,150 | ||
| Acc depreciation for the item sold | 2,558 | ||
| Depreciation expenses for the year | ??? | ||
| Closing Balance | 10,332 |
Solve it, and depreciation expenses = $6,740
Carrying value of assets
| $ | $ | ||
| Opening balance | 6,150 | ||
| carrying value of disposed asset | 2,362 | ||
| Revaluation surplus | 450 | ||
| Depreciation expenses for the year | 6,740 | ||
| Purchase (Additonal) | ??? | ||
| Closing Balance | 6,888 |
Solve it, and Purchase = $9,390
Investing Cash flows
| $ | |
| Purchase (Additional asset) Outflow | (9,390) |
| Proceed from disposal Inflow | 2,952 |
| Total Investing activities (outflow) | (6,438) |
To do the same topic again in ACCA F3 prepare investing cash flows