Harpo Limited has traded for a number of years. financial statement of the company is as follows: Comprehensive Income Statement extract for the year ended 31 December 2017 £'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.
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![Harpo Limited has traded for a number of years.
financial statement of the company is as follows:
Comprehensive Income Statement extract for the year
ended 31 December 2017
Operating Profit after interest
Taxation
Profit after interest and Taxation
Dividends
Harpo Ltd - Statement of Financial Position as at 31 December
2017
2016
£'000 £'000 £'000 £'000
Non-current assets
Land and Buildings
Fixtures and Fittings
Current Assets
Inventory
Receivables
Bank
Total Assets
Equity
Share Capital
Share Premium Account
Profit and Loss account
Non-Current liabilities
8% Loan stock
Current Liabilities
Bank Overdraft
Payables
Corporation Tax
Cost
At 1.1.2017
Additions
Disposals
At 31.12.2017
Depreciation
At 1.1.2017
Charge for the year
Depreciation on disposal
Net Book Value 31 12 2017
542
274
165 981
2,881
0
183
172
950
od oda
0
950
950
1,900
0
Land and Fixtures and
Fittings
Buildings
£'000
£'000
950
1800
100
526
2,426
950
100
485
263
0
Cash Flow from Investing Activities:
Purchase Furniture and Fittings
Sale of Furniture and Fittings
Net Cash Flow from Investing Activities
Cash Flow from Financing Activities:
Dividend Paid
Harpo Ltd - Non-current assets Schedule 201 Proceeds from Issuance of Share Capital
Proceeds from Issuance of Share Premium
950
650
1,600
2050
725
450
2,325
748
2,348
1,400
395
(420)
1,375
950
1400
433
1,833
45
195
355 175 415
2,881
2,348
100
Harpo Limited
Statement of Cash Flow
For the Year Ended December 31, 2017
£'000
£'000
390
(147).
243
Cash Flow from Operating Activities:
Net Income
Changes in Working Capital:
Increase in Inventory
Increase in Receivable
(150)
93
Adjustments for non cash Items:
Depreciation Expense
Decrease in Payable
Decrease in Corporation Tax
Net Cash Flow from Operating Activities
Net Change in Cash
Net Cash Flow from Financing Activities
Cash Balance, Beginning
Cash Balance, Ending
SSSS
$
$
$
$
$
(57)
(11)
(12)
(725)
30
$
(3) $
(150)
400
100
$
$
$
$
£'000
$ 555
$
$
243
395
(83)
(695)
350
210
(45)
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