o5) The following statements was extracted from the books of ShafNita Sdn. Bhd. at 31 December 2019 and 2020. ShafNita Sdn. Bhd. Statement of Financial Position as at 31 December Non Current Assets Building Fixtures less accumulated depreciation Van less accumulated depreciation Current Asset Inventory Trade account receivable Bank Cash Total assets Finance by: Capital account: Balance at 1 January Add: Net profit for the year Cash introduced Less: Drawings Non Current Liabilities Loan (repayable in 10 years time) Current Liablities Account Payable Bank overdraft Retained earnings Total liabilities and equity 2019 RM RM 100,000 3,600 7,840 111,440 11,200 12,800 1,800 440 2020 RM RM 100,000 4,000 14,800 118,800 24,800 16,400 - 400 26,240 41,600 137,680 160,400 74,080 70,400 - 105,080 42,320 20,000 144,480 (39,400) 105,080 20,000 12,600 - 32,600 167,400 (43,200) 124,200 30,000 6,012 188 36,200 137,680 160,400 Additional information at 31 December 2020: ∙ Fixtures bought in 2020 cost RM800. ∙ Van bought in 2020 cost RM11,000. Required: Prepare statement of cash flow for ShafNita Sdn. Bhd. for the year ended 31 December 2020.
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.
no5) The following statements was extracted from the books of ShafNita Sdn. Bhd. at 31 December 2019 and 2020.
ShafNita Sdn. Bhd.
|
Non Current Assets Building Fixtures less Current Asset Inventory Trade Bank Cash Total assets Finance by: Capital account: Balance at 1 January Add: Net profit for the year Cash introduced Less: Drawings Non Current Liabilities Loan (repayable in 10 years time) Current Liablities Account Payable Bank overdraft Total liabilities and equity |
2019 RM RM 100,000 3,600 7,840 111,440 11,200 12,800 1,800 440 |
2020 RM RM 100,000 4,000 14,800 118,800 24,800 16,400 - 400 |
|
26,240 |
41,600 |
|
|
137,680 |
160,400 |
|
|
74,080 70,400 - |
105,080 42,320 20,000 |
|
|
144,480 (39,400) 105,080 20,000 12,600 - 32,600 |
167,400 (43,200) 124,200 30,000 6,012 188 36,200 |
|
|
137,680 |
160,400 |
Additional information at 31 December 2020:
∙ Fixtures bought in 2020 cost RM800.
∙ Van bought in 2020 cost RM11,000.
Required:
Prepare statement of cash flow for ShafNita Sdn. Bhd. for the year ended 31 December 2020.
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