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 Patents and trademarks 20,240 Total Non-Current Assets. 367,440 Current Assets Inventories 59,280 Trade Receivables, net 9,680 Cash and Cash Equivalents 34,600 Prepaid expenses 2,000 105,560 Total Current Assets Total Assets 473,000 Equity Ordinary Share 241.780 Preferred share 38,950 Retained Earnings 70,050 Total Equity 350,780 Non-Current Liabilities Long term loan 80,000 Total Non-Current Liabilities 80,000 Current Liabilities Trade payables 32,920 Income Tax Payables 6,300 Accrued expenses 3,000 Total Current Liabilities 42,220 Total Equity and Liabilities 473.000 300,400 23,800 324,200 47,700 7,800 38,800 1,500 95,800 420,000 200,000 34,000 59,860 293,860 75,000 75,000 39,640 4,800 6,700 51,140 420.000 Pearl Bhd Statement of Profit or Loss and Other Comprehensive income for the year ended 30 June 2021 Sales revenue RM 796,300 385,760 410,540 Less: Cost of Sales Gross Profit Less: Administrative Expenses 75,600 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: 1. Pearl Bhd sold a property with a carrying value of RM98,000 for RM140,000 during the financial year ended 30 June 2021. 2. Included in other expenses is depreciation for the year 2021 amounting to RM34,000. Company has declared and paid dividend for the year. 3. Required: a) Prepare a statement of cash flow using indirect method for Pearl Bhd. for the year ended 30 June 2021 b) Explain TWO (2) differences between indirect method and direct method in preparing statement of cash flows. c) Briefly explain THREE (3) purposes of preparing statement of cash flows.

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