Question for Accounting

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Sridhar is concerned about his company’s cash problem. From the following balance sheets and summary income statement, prepare a cash flow statement for the year ended December 31, 2009.

BALANCE SHEETS at December 31, 2008 and 2009
2009 2008
Rs.RsRs.Rs.
Equity
Share capital 60,00050,000
Retained earnings 96,000 60,000
Total equity156,000110,000

Non-current liabilities
Mortgage loan 35,000 40,000

Current liabilities
Trade payables 39,00027,000
Taxation payable8,0006,000
Bank overdraft 29,000
76,000 33,000
Total equity and liabilities267,000183,000

Non-current assets

Freehold property at cost105,00085,000
Plant and equipment– cost72,00054,000
– dep’n 38,00028,000
34,00026,000
Motor vehicles – cost32,00020,000
– dep’n19,00010,000
13,000 10,000
152,000121,000
Current assets
Inventory 69,00028,000
Trade receivables 46,00024,000
Cash at bank 10,000
115,000 62,000
Total assets267,000183,000

INCOME STATEMENT for the year ended December 31, 2009
Sales 400,000
Cost of goods sold (300,000)
Gross profit 100,000
Other costs (46,000)
Operating profit 54,000
Interest paid (5,000)
49,000
Taxation (8,000)
Net profit for the year 41,000

(a) Dividends declared and paidRs.5,000

(b) Interest charged and paid for the year was Rs. 5,000. During the year, the company had sold equipment for Rs. 3,000 that originally cost Rs. 10,000 and had a written down carrying amount of Rs. 8,000 at the time of sale.
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