Lori Crump owns a small trucking operation.

The bookkeeper presente

Balance Sheets. Crump does not understand how the company can be
yet show an 11000 loss for the year. Prepare a CFS to explain this to C
INCOME STATEMENTS
2010
191400

Revenues
Operating Expenses
Depreciation
Fuel
Driver's Salary
Tax and Licenses
Repairs
Miscellaneous
Income (Loss)

26400
77000
44000
22000
30800
2200

202400
-11000

26400
46200
35200
17600
19800
1100

he bookkeeper presented Crump with the following Income Statements and

ow the company can be 17600 ahead of last year in terms of cash on hand an
CFS to explain this to Crump.
2009
182600

146300
36300

Balance Sheet
31/12/2010
Cash
22000
Account's Receivable
8800
Net Fixed Assets
198000
TOTAL ASSETS
228800
Accounts Payable
Accrued Salaries
Other Accruals
Long term Debt
Capital
TOTAL LIABILITY

30800
8800
3300
100100
85800
228800

Statements and
of cash on hand and

et
31/12/2009
4400
26400
224400
255200
22000
5500
1100
129800
96800
255200

Cash Flow from Operating Activities

Net Loss
Add : Depreciation
Add : Decrease in Accounts Receivables
Add : Increase in Accounts Payable
Add : Increase in Accrued Salary
Add : Increase in Other Accruals
Net Cash Flow from Operating Activities
Cash Flow from Investing Activities
Cash Flow from Financing Activities
Long Term Debt paid
Net Cash Flow from Financing Activities
Net Changes in Cash
Opening Cash
Closing Cash

Amount
-11000
26400
17600
8800
3300
2200
47300
0

-29700
-29700
17600
4400
22000

P/L A/C for 2009 (Rs'000)

Sales
COGS
Gross Margin
Operating Expenses
(dep included Rs 38)
Interest expenses
Interest Income
Gain on sale of investment
Loss on sale of equipment
Net profit before tax
Income Tax
Net profit

700
(520.00)
180.00
(150.00)
30.00
(22.00)
6.00
10.00
(2.00)
22.00
(6.00)
16.00

PREPARE A CASHFLOW STATEMENT USING INDIRECT METHOD

Balance Sheet as at 31 Dec 2009 and 2008 (Rs

Liabilities
31-Dec-09 31-Dec-08
Share Capital
460.00
320.00
R&S
140.00
132.00
Bonds
300.00
250.00
A/P
47.00
38.00
Accrued Liabilities
15.00
10.00
Income Tax Payable
4.00
5.00

966.00
755.00
The following additional info is provided:
1. Purchased Investments for Rs 80000.
2. Sold Equipment that cost Rs 10000 with accumulated Depreciation
3. Issued Rs 100000 Bonds at FV in exchange for an equipment on 31
4. Issued 1400 shares of Rs 100 each at FV.
5. Paid Cash Dividends of Rs 8000.
SING INDIRECT METHOD

31 Dec 2009 and 2008 (Rs'000)

Assets
31-Dec-09 31-Dec-08
Plant & Equipment
720
510
Accumulated Depreciat
(105.00)
(70.00)
LT Investments
115.00
125.00
Inventory
145.00
115.00
A/R
45.00
55.00
Cash
45.00
15.00
Prepaid Expenses
1.00
5.00
966.00
755.00

th accumulated Depreciation of Rs 3000.

ange for an equipment on 31 Dec 2009

Cash Flow from Operating Activities Net Profit before Tax

Add : Loss on equipment
Interest expenses
Depreciation
Less : Interest Income
Gain on equipment
Cash Flow before working capital changes
Add : Decrease in Accounts Receivables
Decrease in Prepaid Expenses
Increase in Accounts Payable
Increase in Accrued Liabilities
Less : Increase in Inventory
Decrease in Income Tax
Less : Income Tax Paid
Net Cash Flow from Operating Activities
Cash Flow from Investing Activities Purchase of Investment
Purchase of Equipment
Sale of Investment
Sale of Equipment
Interest Received
Net Cash Flow from Investing Activities
Cash Flow from Financing Activities Interest Expenses
Share Issue
Cash Dividend
Issue of Bonds
Cash Flow from Financing Activities
Changes in Cash & Cash Equivalents
Add : Opening Cash Balance
Closing Cash Balance

Amount
22
2
22
38
-6
-10
68
10
4
9
5
-30
-1
-6
59

-80
-220
100
5
6
-189

-22
140
-8
50
160
30
15
45

Plant & Equipment A/c

To Opening
510 By Cash(Sales)
To Cash(Purchase)
220 By Closing
730

Cash Flow from Sale of investment = 125+80-115+10(Gain)=1

c
10
720
730

= 125+80-115+10(Gain)=100