question archive On December 31, 2010 and 2011 Balance Sheet of ABC Ltd
On December 31, 2010 and 2011 Balance Sheet of ABC Ltd
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On December 31, 2010 and 2011 Balance Sheet of ABC Ltd. Shows the following ASSETS 2011 2010 Cash 7000 4800 Accounts Receivable 8500 9500 Merchandise Inventory 32500 33200 Equipment 30100 24000 TOTAL 78100 71500 EQUITIES Accumulated Depreciation Equipment Accounts Payable Mortgage Payable Share Capital – Rs. 10 per share Share Premium Retained Earnings TOTAL 6100 16800 6000 30000 2500 16700 78100 4800 19400 10000 25000 12300 71500 Additional Information: 1. A fully depreciated equipment that costs of Rs. 800 was discarded and related accounts were closed. 2. Cash dividend of Rs. 4,000 were declared and paid. Required: Prepare a Cash Flow Statement. Showing Operating, Investing, Financing activities.
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| Workings | |
| Net income | Amount $ |
| Closing- Retained Earnings | 16,700.00 |
| Add: Dividend | 4,000.00 |
| Less: Opening- Retained Earnings | 12,300.00 |
| Net income | 8,400.00 |
| Depreciation expense | |
| Closing- Accumulated depreciation | 6,100.00 |
| Add: Accumulated depreciation on asset sold | 800.00 |
| Less: Opening- Accumulated depreciation | 4,800.00 |
| Depreciation expense | 2,100.00 |
| Decrease in Accounts receivable | |
| Closing Balance | 8,500.00 |
| Less: Opening Balance | 9,500.00 |
| Decrease in Accounts receivable | (1,000.00) |
| Decrease in Inventory | |
| Closing Balance | 32,500.00 |
| Less: Opening Balance | 33,200.00 |
| Decrease in Inventory | (700.00) |
| Decrease in Accounts Payable | |
| Closing Balance | 16,800.00 |
| Less: Opening Balance | 19,400.00 |
| Decrease in Accounts Payable | (2,600.00) |
| Equipment purchased | Amount $ |
| Closing- Equipment | 30,100.00 |
| Add: Cost of equipment discarded | 800.00 |
| Less: Opening- Equipment | 24,000.00 |
| Equipment purchased | 6,900.00 |
| Mortgage paid | |
| Opening Balance | 10,000.00 |
| Less: Closing Balance | 6,000.00 |
| Mortgage paid | 4,000.00 |
| Share capital issued | |
| Closing balance- Share capital | 30,000.00 |
| Closing balance- Share premium | 2,500.00 |
| Less: Opening balance- Share capital | (25,000.00) |
| Share capital issued | 7,500.00 |
| ABC Limited | ||
| Cash flow statement | Amount $ | Amount $ |
| Particulars | ||
| Net Income | 8,400.00 | |
| Adjustment to reconcile Net Income to Net Cash | ||
| Add: | ||
| Depreciation Expense | 2,100.00 | |
| Cash flow from Operations | 10,500.00 | |
| Changes in Current Assets/Current Liabilities | ||
| Decrease in Accounts receivable | 1,000.00 | |
| Decrease in Inventory | 700.00 | |
| Decrease in Accounts Payable | (2,600.00) | (900.00) |
| Net cash provided by operating activities | 9,600.00 | |
| Cash flow from investing activities | ||
| Equipment purchased | (6,900.00) | |
| Net cash used by investing activities | (6,900.00) | |
| Cash flow from financing activities | ||
| Mortgage paid | (4,000.00) | |
| Share capital issued | 7,500.00 | |
| Dividend paid | (4,000.00) | |
| Net cash used by financing activities | (500.00) | |
| Net Increase/(Decrease) in cash | 2,200.00 | |
| Net Cash Balance, beginning | 4,800.00 | |
| Cash Balance, ending | 7,000.00 |
