A. SintokTech Bhd develops and markets semiconductor-related products. The comparative Statement of Financial Position for SintokTech Bhd as at 31 December 2021 were as follows: SintokTech Bhd Statement of Financial Position As at 31 December 2021 2021 2020 RM RM CURRENT ASSETS Inventory Accounts receivable 8,460,000 6,521,250 37.717,500 6,345,000 3,877,500 9.165.000 19.387,500 Cash 52.698,750 NON-CURRENT ASSETS Equity investment Building Less: Accumulated depreciation-building Equipment Less: Accumulated depreciation-equipment Intangible assets (net) -0- 2,115,000 20,973,750 (4,230,000) 14,100,000 (3,172,500) 4,406.250 8,250,000 -0- 31,725,000 (1,410,000) 3.525,000 42.090,000 94,788,750 34,192,500 TOTAL ASSETS 53,580,000 EQUITY Share capital Retained earnings Total equity 23,265,000 38,565,000 14.628,750 53,193,750 4,230,000 27.495,000 CURRENT LIABILITIES Accounts payable Dividends payable Short-term notes payable 2,115,000 3,525,000 3,525,000 -0- 2,115,000 5,640,000 2,820,000 8.460.000 NON-CURRENT LIABILITY Long-term notes payable 35,955,000 17,625,000 TOTAL LIABILITIES 41,595,000 26,085,000 53,580,000 TOTAL EQUITY AND LIABILITIES 94,788,750 Additional information: 1. Equity investments were sold at RM1,198,500 above their cost. 2. Dividends paid during the year were RM3,525,000.
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.
Q3A
Prepare the Statement of
2021 using the indirect method in accordance with MFRS 107 Statement of Cash Flows.
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