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Financial Accounting I – cash flow statement
BBA | BBA-BI | BBA-TT | BCIS 1st
PU 2010 Spring Q. No. 5
Saint Traders is in the process of preparing its statement of cash flows for the year ended December 31, 2009. An income statement and comparative balance sheets for the company are as follows:
Saint Traders Income statement For the year ended December 31, 2009
| Sales revenue Cost of goods sold | Rs. 89,000 Rs. 57,000 |
| Gross margin Depreciation expenses Advertising expenses Salaries expenses | Rs. 32,000 Rs. 6,500 Rs. 3,200 Rs. 12,000 |
| Total operating expenses Operating income Loss on sale of land Income before tax Income tax expense Net income | Rs. 21,700 Rs. 10,300 Rs. 2,500 Rs. 7,800 Rs. 2,600 Rs. 5,200 |
Saint Traders Comparative Balance Sheets
| Dec. 31, 2009 | Dec. 31, 2008 | |
| Cash Account receivables Inventory Prepaid advertising Total current assets Land Equipment Accumulated depreciation Total long-term assets | Rs. 12,000 Rs. 22,000 Rs. 25,400 Rs. 10,000 Rs. 69,400 Rs. 1,20,000 Rs. 1,90,000 (Rs. 70,000) Rs. 2,40,000 | Rs. 9,500 Rs. 18,400 Rs. 20,500 Rs. 8,600 Rs. 57,000 Rs. 80,00 Rs. 1,30,000 (Rs. 63,000) Rs. 1,46,500 |
| Total Assets | Rs. 3,09,400 | Rs. 2,03,000 |
| Account payable Salaries payable Income tax payable Total current liabilities Capital stock Retained earnings Total stockholder’s equity | Rs. 15,300 Rs. 14,000 Rs. 1,200 Rs. 50,500 Rs. 2,00,000 Rs. 78,900 Rs. 2,78,900 | Rs. 12,100 Rs. 16,400 Rs. 700 Rs. 29,200 Rs. 1,00,000 Rs. 74,3000 Rs. 1,74,300 |
| Total liabilities and equity | Rs. 3,09,400 | Rs. 2,03,000 |
Additional information:
a. Land was acquired during the year for Rs. 70,000.
b. An unimproved parcel of land was sold during the year for Rs. 27,500. Its original cost to Saint Traders was Rs. 30,000.
c. A specialized piece of equipment was acquired in exchange for capital stock in the company. The value of capital stock was Rs. 60,000.
d. In addition to the capital stock issued in exchange for specialized equipment, stock was sold for Rs. 40,000.
e. Dividends of Rs. 600 were paid.
Required: A statement of cash flows for the year ended December 31,
Solution:
Ending balance not matching.
Note: On the above question there are so many mistakes due to these reasons the answer to this question is not matched.