ShafNita Sdn. Bhd. Statement of Financial Position as at 31 December 2019 2020 RM RM RM RM Non Current Assets Building 100,000 100,000 Fixtures less accumulated depreciation 3,600 4,000 Van less accumulated depreciation 7,840 14,800 111,440 118,800 Current Asset Inventory 11,200 24,800 Trade account receivable 12,800 16,400 Bank 1,800 - Cash 440 400 26,240 41,600 Total assets 137,680 160,400 Finance by: Capital account: Balance at 1 January 74,080 105,080 Add: Net profit for the year 70,400 42,320 Cash introduced - 20,000 144,480 167,400 Less: Drawings (39,400) (43,200) 105,080 124,200 Non Current Liabilities Loan (repayable in 10 years time) 20,000 30,000 Current Liablities Account Payable 12,600 6,012 Bank overdraft - 188 Retained earnings 32,600 36,200 Total liabilities and equity 137,680 160,400 Additional information at 31 December 2020: Fixtures bought in 2020 cost RM800. Van bought in 2020 cost RM11,000. Required: Prepare statement of cash flow for ShafNita Sdn. Bhd. for the year ended 31 December 2020.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
ShafNita Sdn. Bhd.
2019 2020
RM RM RM RM
Non Current Assets
Building 100,000 100,000
Fixtures less accumulated depreciation 3,600 4,000
Van less accumulated depreciation 7,840 14,800
111,440 118,800
Current Asset
Inventory 11,200 24,800
Trade
Bank 1,800 -
Cash 440 400
26,240 41,600
Total assets 137,680 160,400
Finance by:
Capital account:
Balance at 1 January 74,080 105,080
Add: Net profit for the year 70,400 42,320
Cash introduced - 20,000
144,480 167,400
Less: Drawings (39,400) (43,200)
105,080 124,200
Non Current Liabilities
Loan (repayable in 10 years time) 20,000 30,000
Current Liablities
Account Payable 12,600 6,012
Bank overdraft - 188
Total liabilities and equity 137,680 160,400
Additional information at 31 December 2020:
Fixtures bought in 2020 cost RM800.
Van bought in 2020 cost RM11,000.
Required:
Prepare statement of
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