3. The statement of financial position of Grand Hypermarket and Golden Supermarket at 31 Dec 2021 are as follows, Statement of Financial Position as on 31 Dec 2021 Grand Hypermarket Golden Supermarket Assets Non-Current Assets Property, plant and equipment 500,000 100,000 Investment in Rocket LLC 100,000 Total Non-Current Assets 600,000 100,000 Current Assets 300,000 50,000 Total Assets 900,000 150,000 Equity Ordinary share capital 400,000 80,000 Preference Share capital 10,000 Retained earnings 150,000 30,000 Total Equity Liabilities Current liabilities 350,000 30,000 150,000 Total Equity & Liabilities 900,000 1. Grand Hypermarket acquired 75% of Equity and 50% of Preference shares on 31 Dec 2020 for OMR 100,000 2. On 31 Dec 2020, the retained earnings of Golen was OMR 25,000. 3. Golden has issued no shares since being acquired by Grand. 4. Goodwill arising on consolidation has suffered an impairment loss of 50% since acquisition. 5. Fair value of Golden's non-current assets was OMR 8,000 more than their book value as on 31 Dec 2020. 6. The above revaluation has not been reflected in the books of Golden 7. Prepare a consolidated statement of financial position as at 31 Dec 2021.
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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