Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem 1) Part A

ABC Ltd finds that its opening bank balance of Rs.180, 000 as on April 1 has been converted into an overdraft of Rs.75, 000 by the end of the year. The following information is given below:

Particulars                                           Year beginning        Year end
Fixed assets                                             750,000            1,120,000
Stock in trade                                           190,000              330,000
Sundry Debtors                                        380,000               335,000
Trade Creditors                                         270,000               350,000
Share Capital                                            250,000               300,000
Share premium                                           -                         25,000
Bills receivable                                         87,500                   95,000

Additional information:

i) The profit before depreciation and Income tax was Rs 240,000.

ii) During the Year, Income Tax to the extent of Rs 137,500 was paid.

iii) Dividend paid were final on the Capital as on April 1 at 10 % and interim at 5% on the year end Capital.

Required:

1. Prepare a Cash Flow Statement to show how the opening bank balance of Rs 180,000 has been converted into an Overdraft of Rs.75, 000 at the end of the year.

2. Why is a Cash flow Statement considered an essential component of the primary financial statements and what information is it intended to convey?

Part B

Depreciation has been described as the measure of the wearing out, consumption or other reduction in the useful economic life of a fixed asset.

(a) Give three causes of depreciation, and for each give the type of fixed asset for which that cause is suitable.

(b) What factors must be taken into account when determining amount of depreciation and its allocation between various accounting periods?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M96369

Have any Question? 


Related Questions in Basic Finance

Explain how closeout netting reduces the credit risk for

Explain how closeout netting reduces the credit risk for two firms engaged in several derivatives contracts ? How does the legal system impose risk on a derivatives dealer? Consider a firm that has assets that generate c ...

Assume two mutually exclusive investments have the

Assume two mutually exclusive investments have the following cash flows: Project Year 0 Year 1 Year 2 Year 3 Project A -$200 $100 $100 $100 Project B -$300 $150 $125 $150 Complete the following table assuming that the co ...

Explain how characteristics of mncs can affect the cost of

Explain how characteristics of MNCs can affect the cost of capital ? From an investor's standpoint, have small companies, in general over the past, been more profitable than their larger brethren?

Empirical studies have established that the betas of

Empirical studies have established that the betas of conglomerate firms have been significantly above 1. What does this imply about diversification as a strong motive for conglomerate mergers? Over a long period of time ...

A small firm makes three similar products which all follow

A small firm makes three similar products, which all follow the same three-step process, consist- ing of milling, inspection, and drilling. Product A requires 12 minutes of milling, 5 minutes for inspection, and 10 minut ...

Uncertain scenario - maximizing the meanthe potential

Uncertain Scenario - Maximizing the Mean The potential revenues of all projects are in fact uncertain. The company determines that the revenue for project 1 is following a uniform distribution ranging from $1,200,000 to ...

The following excerpt if from the notes to the financial

The following excerpt if from the notes to the financial statements in the 2009 Annual Report of Bank of America (p. 147): The Corporation enters into trading derivatives to facilitate client transactions for proprietary ...

If you were using a full length centerline gage rod to

If you were using a full length, centerline, gage rod to measure DL, how much change would you expect to see at 2508F? 8. What DL from ‘‘before tightening'' would you expect to see at 2508F if you were using ultrasonics ...

1 according to readygov what are the three basic steps

1. According to Ready.Gov, what are the three basic steps people can take to prepare for any type of disaster? 2. What are the seven key elements that can be used to measure the comprehensive nature of an evacuation plan ...

1 discuss why it is important to coordinate the arrival of

1. Discuss why it is important to coordinate the arrival of procurement shipments with the dispatching of customer shipments. 2. Discuss the driver and role of the inventory deployment and management system.

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro