QUESTION 4 Pearl Bhd is a manufacturing company operating in Puchong, Selangor. Since 2017, the company has been producing steel products. At the end of the financial year 2021, the financial statement for Pearl Bhd is as follows: Pearl Bhd Statement of Financial Position as at 30 June 2021 2020 RM RM Non-Current Assets Property, Plant & Equipment 347,200 300,400 Patents and trademarks 20,240 23,800 Total Non-Current Assets 367,440 324,200 Current Assets Inventories 59,280 47,700 Trade Receivables, net 9,680 7,800 Cash and Cash Equivalents 34,600 38,800 Prepaid expenses 2,000 1,500 Total Current Assets 105,560 95,800 Total Assets 473,000 420,000 Equity Ordinary Share 241,780 200,000 Preferred share 38,950 34,000 Retained Earnings 70,050 59,860 Total Equity 350,780 293,860 Non-Current Liabilities Long term loan 80,000 75,000 Total Non-Current Liabilities 80,000 75,000 Current Liabilities Trade payables 32,920 39,640 Income Tax Payables 6,300 4,800 Accrued expenses 3,000 6,700 Total Current Liabilities 42,220 51,140 Total Equity and Liabilities 473,000 420,000 Pearl Bhd Statement of Profit or Loss and Other Comprehensive income for the year ended 30 June 2021 RM Sales revenue 796,300 Less: Cost of Sales 385,760 Gross Profit 410,540 Less: Administrative Expenses 75,600 Distribution Costs 88,240 Other expenses 156,700 Income before Tax 90,000 Less: Income Tax Expense 26,890 Net income 63,110 Additional information: Pearl Bhd sold a property with a carrying value of RM98,000 for RM140,000 during the financial year ended 30 June 2021. Included in other expenses is depreciation for the year 2021 amounting to RM34,000. The company has declared and paid dividends for the year. Required: Prepare a statement of cash flow using indirect method for Pearl Bhd. for the year ended 30 June 2021 Explain TWO (2) differences between the indirect and direct methods in preparing the statement of cash flows. Briefly explain THREE (3) purposes of preparing the statement of cash flows.

QUESTION 4 Pearl Bhd is a manufacturing company operating in Puchong, Selangor. Since 2017, the company has been producing steel products. At the end of the financial year 2021, the financial statement for Pearl Bhd is as follows: Pearl Bhd Statement of Financial Position as at 30 June 2021 2020 RM RM Non-Current Assets Property, Plant & Equipment 347,200 300,400 Patents and trademarks 20,240 23,800 Total Non-Current Assets 367,440 324,200 Current Assets Inventories 59,280 47,700 Trade Receivables, net 9,680 7,800 Cash and Cash Equivalents 34,600 38,800 Prepaid expenses 2,000 1,500 Total Current Assets 105,560 95,800 Total Assets 473,000 420,000 Equity Ordinary Share 241,780 200,000 Preferred share 38,950 34,000 Retained Earnings 70,050 59,860 Total Equity 350,780 293,860 Non-Current Liabilities Long term loan 80,000 75,000 Total Non-Current Liabilities 80,000 75,000 Current Liabilities Trade payables 32,920 39,640 Income Tax Payables 6,300 4,800 Accrued expenses 3,000 6,700 Total Current Liabilities 42,220 51,140 Total Equity and Liabilities 473,000 420,000 Pearl Bhd Statement of Profit or Loss and Other Comprehensive income for the year ended 30 June 2021 RM Sales revenue 796,300 Less: Cost of Sales 385,760 Gross Profit 410,540 Less: Administrative Expenses 75,600 Distribution Costs 88,240 Other expenses 156,700 Income before Tax 90,000 Less: Income Tax Expense 26,890 Net income 63,110 Additional information: Pearl Bhd sold a property with a carrying value of RM98,000 for RM140,000 during the financial year ended 30 June 2021. Included in other expenses is depreciation for the year 2021 amounting to RM34,000. The company has declared and paid dividends for the year. Required: Prepare a statement of cash flow using indirect method for Pearl Bhd. for the year ended 30 June 2021 Explain TWO (2) differences between the indirect and direct methods in preparing the statement of cash flows. Briefly explain THREE (3) purposes of preparing the statement of cash flows.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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QUESTION 4

Pearl Bhd is a manufacturing company operating in Puchong, Selangor. Since 2017, the company has been producing steel products. At the end of the financial year 2021, the financial statement for Pearl Bhd is as follows:

Pearl Bhd Statement of Financial Position as at 30 June
	2021	2020
	RM	RM
Non-Current Assets
Property, Plant & Equipment	347,200	300,400
Patents and trademarks	20,240	23,800
Total Non-Current Assets	367,440	324,200

Current Assets
Inventories	59,280	47,700
Trade Receivables, net	9,680	7,800
Cash and Cash Equivalents	34,600	38,800
Prepaid expenses	2,000	1,500
Total Current Assets	105,560	95,800
Total Assets	473,000	420,000

Equity
Ordinary Share	241,780	200,000
Preferred share	38,950	34,000
Retained Earnings	70,050	59,860
Total Equity	350,780	293,860

Non-Current Liabilities
Long term loan	80,000	75,000
Total Non-Current Liabilities	80,000	75,000

Current Liabilities
Trade payables	32,920	39,640
Income Tax Payables	6,300	4,800
Accrued expenses	3,000	6,700
Total Current Liabilities	42,220	51,140
Total Equity and Liabilities	473,000	420,000

Pearl Bhd Statement of Profit or Loss and Other Comprehensive income for the year ended 30 June 2021
	RM
Sales revenue	796,300
Less: Cost of Sales	385,760
Gross Profit	410,540
Less: Administrative Expenses	75,600
Distribution Costs	88,240
Other expenses	156,700
Income before Tax	90,000
Less: Income Tax Expense	26,890
Net income	63,110

Additional information:

Pearl Bhd sold a property with a carrying value of RM98,000 for RM140,000 during the financial year ended 30 June 2021.

Included in other expenses is depreciation for the year 2021 amounting to RM34,000.

The company has declared and paid dividends for the year.

Required:

Prepare a statement of cash flow using indirect method for Pearl Bhd. for the year ended 30 June 2021

Explain TWO (2) differences between the indirect and direct methods in preparing the statement of cash flows.

Briefly explain THREE (3) purposes of preparing the statement of cash flows.

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