Question

Q-1 From the following balance sheet of Al-Hussain Co Ltd prepare a cash flow statement.

LIABILITIES	2011	2012	ASSETS	2011	2012
Share Capital	36000	40000	Machinery (Gross)	210000	260000
Depreciation Reserve	120000	124000	Debtors	128000	106000
P& L Account	90000	144000	Stock	70000	80000
Debenture	120000	108000	Discount on issue of share	6000	4000
Creditors	70000	64000	Bank Balance	22000	30000
TOTAL	4360000	480000	TOTAL	436000	480000

Answer 1

Cash Flow statement is as follows:

	$	$
Cash Flow from Operating Activities
Net Income ($144,000 - $90,000)		54,000
Adjustment to Reconcile the net income:
Depreciation	4,000
Discount on Issue of Shares	2,000
Increase in stock	(10,000)
Decrease in Debtors	22,000
Decrease in Creditors	(6,000)	12,000
Net Cash Flow from Operating Activities		66,000
Cash Flow From Invetsing Activities
Purchase of Machinery		(50,000)
Cash Flow From Financing Activities
Redemption of Debenture	(12,000)
Issue of Share Capital	4,000
Net Cash Flow From Financing Activity		(8,000)
Total Cash Flow Increase/(Decrease)
Begining Cash Balance		22,000
Ending Cash Balance		30,000