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Depay Co Case

Extracts from Depay’s financial statements for the year ended 30 September 20X2 are shown below.

Statement of profit or loss extract:                                                                      $000

Finance costs                                                                                                                             (60)

Profit before tax                                                                                                                       142

Income tax expense                                                                                                                 (57)

Profit for the year                                                                                                                     85                        

Statement of financial position extract:                                  20X2                                    20X1

                                                                                                                        $000                                    $000     

Retained earnings                                                                                       900                                      940

5% loan notes                                                                                              515                                      500

Deferred tax liability                                                                                   150                                      125

Tax payable                                                                                                   30                                         40

Lease liabilities                                                                                            300                                      310

The following information is relevant:

1. Depay disposed of some land during the year, which had a remaining revaluation surplus at disposal of $20,000.
2. $40,000 of the finance costs relate to the loan notes which are repayable at a premium, making the effective rate of interest 8%. The remaining interest relatesto the lease liabilities.
3. During the year, Depay received a dividend from a subsidiary.
4. Depay acquired $70,000 of new assets under lease agreements during the year. Depay makes annual payments under leases on 30 September each year.

1. What will be recorded in Depay’s statement of cash flows under dividends paid?
2. What will be recorded in Depay’s statement of cash flows under interest paid?
3. What will be recorded in Depay’s statement of cash flows under tax paid?
4. Where should the dividend received be shown in Depay’s statement of cash flows?
5. How much should be shown within financing activities in respect of lease liabilities repaid?

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