1. Sales Less: Cost of Sales 2. GROSS PROFIT Add: Other Income Consultation Service Revenue Gain on Sale of Plant & Equipment Less: Expenses: Interest Expense Income Tax Expense Other Operating Expenses NET PROFIT 1. 2. 3. 4. Adelaide Pharmacy Ltd Statement of Profit and Loss and Other Comprehensive Income for the year ended 30 June 2022 Additional information: Plant and Equipment costing $161,000 was purchased for cash during the year. Plant and Equipment costing $45,500 was sold during the year. Other Operating Expenses include $35,500 depreciation expense on Plant and Equipment All sales and purchases of inventory were on credit. Land was sold at cost. 5. 6. Required: Ignore taxes. 22,550 5,500 3,234 7,997 55,187 Show all workings as most of the marks will come from workings! $ $ 216,700 -109,406 107,294 28,050 135,344 66,418 68,926 Prepare the Statement of Cash Flows for Pharmacy Adelaide Ltd for the year ended 30 June 2020 using the direct method. Reconcile profit and net cash provided (used) by operating activities using the indirect method.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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