The Balance Sheet and Income Statement of a company have been given below: Liabilities Year I Year II Assets Year I Year II Equity share capital…
BBS Financial Accounting and Analysis · 2082 · Solved Question with Answer
The Balance Sheet and Income Statement of a company have been given below:
| Liabilities | Year I | Year II | Assets | Year I | Year II |
| Equity share capital | 800,000 | 1,000,000 | Land and building | 300,000 | 340,000 |
| Share premium | 80,000 | 100,000 | Plant and machinery | 500,000 | 700,000 |
| Bank loan | - | 200,000 | Inventories | 230,000 | 300,000 |
| Accounts payable | 180,000 | 160,000 | Accounts receivable | 220,000 | 250,000 |
| Provision for taxation | 50,000 | 60,000 | Provision for doubtful debts | (40,000) | (30,000) |
| Profit and loss | 140,000 | 280,000 | Cash at bank | 40,000 | 240,000 |
| Total | 1,250,000 | 1,800,000 | Total | 1,250,000 | 1,800,000 |
| Particulars | Rs. | Rs. |
| Sales | 1,000,000 | |
| Less: Cost of goods sold | 600,000 | |
| Gross profit | 400,000 | |
| Less: Operating expenses | 100,000 | |
| Interest on bank loan | 20,000 | |
| Depreciation on machinery | 40,000 | |
| Provision for taxation | 60,000 | |
| Loss sales of machine (Book value Rs. 60,000) | 40,000 | 260,000 |
| Net income | 140,000 |
Required: Cash flow statement by using direct method