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please help me with this question.
Extracts from a company’s statements of financial position show the following non-current assets.
30 June
20X8
20X9
$
$
Intangible assets
Development expenditure
60,000
95,000
Property, plant and equipment
Freehold property
750,000
1,230,000
Plant and machinery
320,000
370,000
Fixtures and fittings
105,000
90,000
The expenditure for the year on development projects had been $55,000. The building element of the freehold property was depreciated by $6,000 and then revalued on 30 June 20X9 by $95,000. Plant and machinery with a carrying amount of $14,000 was disposed of in November 20X8 for $8,000. Depreciation on the other plant and machinery for the year amounted to $37,000. Depreciation of $35,000 has been charged on fixtures and fittings.
What is the total figure relating to non-current assets included in the reconciliation of profit before tax to cash flows from operating activities?
A $84,000
B $92,000
C $98,000
D $104,000The only items relating to non-current assets that appear in the reconciliation of profit to cash flows from operating activities are any profit or loss on sale, and any depreciation/amortisation.
Some plant was sold – there was a loss of 6,000, so this would be added back to profit.
Development expenditure would have gone up to 115,000 (60000+55000). Since it ends the year at 95,000, there must have been amortisation of 20,000 (115000-95000). This would be added back.
Freehold property was depreciated by 6,000 – this would be added back.
Depreciation on plant and machinery (37000) and on f&f (35000) would also be added back.
If you add them all up, you get answer (D)
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