The balance sheet of a company for two years are given below Liabilities Year1 Year 2 Assets Year 1 Year2 Equity Share capital 800,000 900,000 Fixed…
BBS Financial Accounting and Analysis · 2078 · Solved Question with Answer
The balance sheet of a company for two years are given below
| Liabilities | Year1 | Year 2 | Assets | Year 1 | Year2 |
| Equity Share capital | 800,000 | 900,000 | Fixed assets | 600,000 | 800,000 |
| Share premium | 80,000 | 90,000 | Inventory | 200,000 | 250,000 |
| 12% Debentures | 100,000 | 50,000 | Accounts receivable | 200,000 | 160,000 |
| Provision for tax | 20,000 | 30,000 | Prepaid expenses | 20,000 | 10,000 |
| Provision for dividend | 10,000 | 20,000 | Cash | 80,000 | 70,000 |
| Accounts payable | 60,000 | 90,000 | |||
| profit and loss a/c | 30,000 | 110,000 | |||
| Total | 1,100,000 | 1,290,000 | Total | 1,100,000 | 1,290,000 |
Income Statement for the Year 2
| Particulars | Rs. | |
| Sales revenue | 900,000 | |
| Less: Cost of goods sold | 600,000 | |
| Gross Profit | 300,000 | |
| Less: Operating expenses: | ||
| Administrative expenses: | 120,000 | |
| Depreciation | 90,000 | |
| Interest paid | 10,000 | |
| Premium on redemption of debentures | 5,000 | |
| Total operating expenses | 225,000 | |
| Net income | 75,000 | |
| Add: Gain on sale of fixed assets costing Rs. 35,000 | 5,000 | |
| Retained earning | 80,000 |
Required: Cash flow statement showing operating, investing and financing activities.