Liabilities 2019 2018 GHC GHC Share capital 400,000 300,000 8% preference share capital 100,000 150,000 General reserves 70,000 40,000 Profit & Loss 48,000 30,000 Proposed Dividend 50,000 42,000 Creditors 83,000 55,000 Bills payable 16,000 20,000 Provision for tax 50,000 40,000 817,000 677,000 Assets 2019 2018 GHC GHC Goodwill 90,000 115,000 Land & Building 170,000 200,000 Plant 200,000 80,000 Debtors 200,000 160,000 Stock 109,000 77,000 Bills receivable 30,000 20,000 Cash in hand 10,000 15,000 Cash at bank 8,000 10,000 817,000 677,000 The following information has been extracted from the books of K.K Fosu Limited Liability Company for the year to 31st December, 2019. Depreciation of GHc. 10,000 and GHc. 20,000 have been charged on Plant and Land and Buildings in 2019. An interim dividend of GHc 20,000 has been paid in 2019. GHc 35,000 Income tax was paid during 2019. Profit before tax in 2019 was GHc 188,000 Using IAS 7 indirect method, prepare a statement of cash flow for the year ended 31 December 2019 showing the following: Net cash from operating activities, Net cash from investing activities , Net cash from financing activities, Cash and cash equivalent at end of period?
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.
|
Liabilities |
2019 |
2018 |
|
GHC |
GHC |
|
|
Share capital |
400,000 |
300,000 |
|
8% |
100,000 |
150,000 |
|
General reserves |
70,000 |
40,000 |
|
Profit & Loss |
48,000 |
30,000 |
|
Proposed Dividend |
50,000 |
42,000 |
|
Creditors |
83,000 |
55,000 |
|
Bills payable |
16,000 |
20,000 |
|
Provision for tax |
50,000 |
40,000 |
|
|
817,000 |
677,000
|
|
Assets |
2019 |
2018 |
|
GHC |
GHC |
|
|
|
90,000 |
115,000 |
|
Land & Building |
170,000 |
200,000 |
|
Plant |
200,000 |
80,000 |
|
Debtors |
200,000 |
160,000 |
|
Stock |
109,000 |
77,000 |
|
Bills receivable |
30,000 |
20,000 |
|
Cash in hand |
10,000 |
15,000 |
|
Cash at bank |
8,000 |
10,000 |
|
|
817,000 |
677,000 |
The following information has been extracted from the books of K.K Fosu Limited Liability Company for the year to 31st December, 2019.
An interim dividend of GHc 20,000 has been paid in 2019.
GHc 35,000 Income tax was paid during 2019.
Profit before tax in 2019 was GHc 188,000
Using IAS 7 indirect method, prepare a statement of
Net cash from operating activities, Net cash from investing activities , Net cash from financing activities, Cash and cash equivalent at end of period?
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