The 2021 comparative balance sheet and income statement of Auga Company Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the attached financial information. Notes Acquisition of plant asset during 2021 600,900 Sale proceeds from sale of plant asset 356,000 Receipt for issuance of notes payable 384,900 Payment for note payable 450,000 Dividend paid 148,500 Book value of equipment sold 240,500 1. Requirements A. Reconstruct the company’s comparative balance sheet for 2020/2021 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure. B. Prepare a complete statement of cash flows for 2021 using the indirect method.
Scenario:
The 2021 comparative
The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the attached financial information.
Notes |
||
Acquisition of plant asset during 2021 |
600,900 |
|
Sale proceeds from sale of plant asset |
356,000 |
|
Receipt for issuance of notes payable |
384,900 |
|
Payment for note payable |
450,000 |
|
Dividend paid |
148,500 |
|
Book value of equipment sold |
240,500 |
1. Requirements
A. Reconstruct the company’s comparative balance sheet for 2020/2021 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.
B. Prepare a complete statement of cash flows for 2021 using the indirect method.
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