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    Accounting (08-09-2018) Set-2

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    Shakil Shekh
    The document provides a balance sheet, income statement, and additional information for a project for the years 2016 and 2017. It summarizes assets, liabilities, equity, revenues, expenses, and retained earnings. Key events in 2017 included issuing stock for cash and land, redeeming and converting bonds, purchasing and selling equipment, selling investments and land, and declaring and paying dividends. The requirement is to prepare a cash flow statement for 2017 using the direct and indirect methods based on this financial information.

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    Accounting (08-09-2018) Set-2

    Uploaded by

    Shakil Shekh
    36 views2 pages
    The document provides a balance sheet, income statement, and additional information for a project for the years 2016 and 2017. It summarizes assets, liabilities, equity, revenues, expenses, and retained earnings. Key events in 2017 included issuing stock for cash and land, redeeming and converting bonds, purchasing and selling equipment, selling investments and land, and declaring and paying dividends. The requirement is to prepare a cash flow statement for 2017 using the direct and indirect methods based on this financial information.

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    The document provides a balance sheet, income statement, and additional information for a project for the years 2016 and 2017. It summarizes assets, liabilities, equity, revenues, expenses, and retained earnings. Key events in 2017 included issuing stock for cash and land, redeeming and converting bonds, purchasing and selling equipment, selling investments and land, and declaring and paying dividends. The requirement is to prepare a cash flow statement for 2017 using the direct and indirect methods based on this financial information.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    36 views2 pages

    Accounting (08-09-2018) Set-2

    Uploaded by

    Shakil Shekh
    The document provides a balance sheet, income statement, and additional information for a project for the years 2016 and 2017. It summarizes assets, liabilities, equity, revenues, expenses, and retained earnings. Key events in 2017 included issuing stock for cash and land, redeeming and converting bonds, purchasing and selling equipment, selling investments and land, and declaring and paying dividends. The requirement is to prepare a cash flow statement for 2017 using the direct and indirect methods based on this financial information.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 2

    Problem # 01.

    A comparative balance sheet and a summarized income and retained earnings statement of a project are given below:
    Balance sheet as at 31 December 2017

    Assets 2017 2016


    Current Assets: 1.25,000 1,21,000
    Cash 6,800 2,400
    Bank 25,500 36,200
    Accounts Receivable (Trade) 42,000 43,000
    Interest receivable 4,200 3,400
    Prepaid Expenses 4,000 5,000
    Inventory 35,000 31,000
    Non-current Assets: 252,000 2,20,000
    Investments 12,000 16,000
    Fixed Assets:
    Land(at cost) 1,15,000 1,20,000
    Buildings 1,10,000 77,000
    Equipments 28,000 20,000

    Depreciation :
    Building (5,000) (3,000)
    Equipments (8,000) (10,000)

    Total Assets 3,77,500 3,41,000


    Liabilities
    Current Liabilities: 40,500 43,000
    Accounts Payable Trade 21,000 22,000
    Accrued Expenses Payable 6,500 7,000
    Interest Payable 5,000 4,000
    Income Tax payable 8,000 5,000
    Dividend Payable - 5,000

    Non-current Liabilities: 32,000 60,000

    Bond Payable 22,000 35,000


    Debenture (5%) 10,000 25,000
    Total Liabilities 72,500 1,03,000
    Capital
    Paid-up Capital Tk. 1 per share 1,80,000 1,60,000
    Share premium 40,000 30,000
    Retained Earnings 85,000 48,000
    3,77,500 3,41,000
    Total Liabilities & Capital

    1,000
    Combined Statement of Income and
    Retained Earnings for the year ended 31 Dec. 2017

    Sales (net) 1,95,000


    Cost of Goods sold (85,000)
    Gross Profit 1,10,000
    Operating expenses (40,000)
    Operating income 70,000
    Interest Income 9,000
    Gain on Disposal of equipment 1,000
    Gain on sale of investment 3,000
    Interest Expenses 3,000
    Net Income before tax 80,000
    Tax 25,000
    Net income after tax 55,000
    Retained Earnings at 31 Dec. 2016 48,000
    Earnings available for appropriation 1,03,000
    Dividend paid (18,000)
    Retained Earnings at 31 Dec. 2017 85,000

    Additional Information:

    a) Operating Expenses included Tk. 3,000 ( Tk. 2,000 for building and rest Tk. 1,000 for equipments) for
    depreciation and Tk. 1000 from prepaid expenses.
    b) Cash dividend were declared and paid in within the year.
    c) Equipment with cost of Tk. 16,000 was purchased for cash. Equipment with a cost of Tk. 8,000 and book
    value of Tk.5,000 was sold for Tk.6,000 cash.
    d) Bonds of Tk. 10,000 were redeemed at their face value for cash. Bonds of Tk. 3,000 were converted into
    common stock.
    e) Common Stock ( Tk. 1 par ) of Tk. 13,000 was issued for cash.
    f) Common Stock ( Tk. 1 par ) of Tk. 4,000 was issued to acquire land.
    g) Land was sold on its book value for cash.
    h) Investment costing Tk. 4,000 were sold at a gain of Tk. 3,000.

    Requirement: Prepare a cash flow statement in Direct and Indirect Method for 2017.

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