The following Statement of Financial Position was extracted from the books of Gagah Perkasa Sdn Bhd at 31 December 2018 and 2019 Gagah Perkasa Sdn Bhd Statement of Financial Position as at 31 December 2018 2019 RM RM RM RM Non-current Assets Buildings 50,000 50,000 Fixtures less Depreciation 1,800 2,000 Van less Depreciation 3,920 7,400 55,720 59,400 Current Assets Inventory 5,600 12,400 Trade accounts receivables 6,400 8,200 Bank 900 - Cash 220 200 13,120 20,800 TOTAL ASSETS 68,840 80,200 Financed by : Capital account : Balance as at 1 January 37,040 52,540 Add : Net Profit 35,200 21,160 Cash introduced - 10,000 72,240 83,700 Less : Drawings (19,700) (21,600) 52,540 62,100 Non-current Liabilities Loan (repayable in 10 years’ time) 10,000 15,000 Current Liabilities Account payable 6,300 3,006 Bank overdraft - 94 TOTAL LIABILITIES 16,300 18,100 TOTAL LIABILITIES AND CAPITAL 68,840 80,200 Additional information at 31 December 2019: Fixtures bought in 2019 cost Van bought in 2019 cost RM5,500. Required: Prepare Statement of Cash Flow for Gangsa Perak Sdn Bhd for the ended 31 December 2019.
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
- The following
Statement of Financial Position was extracted from the books of Gagah Perkasa Sdn Bhd at 31 December 2018 and 2019
Gagah Perkasa Sdn Bhd
Statement of Financial Position as at 31 December
|
|
2018 |
|
2019 | |
|
|
RM |
RM |
RM |
RM |
|
Non-current Assets |
|
|
|
|
|
Buildings |
|
50,000 |
|
50,000 |
|
Fixtures less |
|
1,800 |
|
2,000 |
|
Van less Depreciation |
|
3,920 |
|
7,400 |
|
|
|
55,720 |
|
59,400 |
|
Current Assets |
|
|
|
|
|
Inventory |
5,600 |
|
12,400 |
|
|
Trade accounts receivables |
6,400 |
|
8,200 |
|
|
Bank |
900 |
|
- |
|
|
Cash |
220 |
|
200 |
|
|
|
|
13,120 |
|
20,800 |
|
TOTAL ASSETS |
|
68,840 |
|
80,200 |
|
|
|
|
|
|
|
Financed by : |
|
|
|
|
|
Capital account : |
|
|
|
|
|
Balance as at 1 January |
37,040 |
|
52,540 |
|
|
Add : Net Profit |
35,200 |
|
21,160 |
|
|
Cash introduced |
- |
|
10,000 |
|
|
|
72,240 |
|
83,700 |
|
|
Less : Drawings |
(19,700) |
|
(21,600) |
|
|
|
|
52,540 |
|
62,100 |
|
Non-current Liabilities |
|
|
|
|
|
Loan (repayable in 10 years’ time) |
10,000 |
|
15,000 |
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
Account payable |
6,300 |
|
3,006 |
|
|
Bank overdraft |
- |
|
94 |
|
|
TOTAL LIABILITIES |
|
16,300 |
|
18,100 |
|
TOTAL LIABILITIES AND CAPITAL |
|
68,840 |
|
80,200 |
Additional information at 31 December 2019:
- Fixtures bought in 2019 cost
- Van bought in 2019 cost RM5,500.
Required:
Prepare Statement of
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