1. A partial balance sheet for orange company is presented below.

 

Orange Company Income statement For the year Ended December 31, 2019
Sales		$7,528
Cost of goods sold		1,100
Gross Profit		$6,428
Operating expenses:
Salaries	$2250
Depreciation expense	900
Miscellaneous	1,278	(4,428)
Net Income		$2,000

Orange Company Balance Sheet As at 31st December 2019
2017	2018
$800	$500	Cash
500	350	Account receivable
2,400	2,800	Inventories
250	250	Prepaid expenses
3,150	4,500	Furniture
6,500	7,000	Accounts Payable
600	500	Salaries Payable
2,000	2,200	Short term Bank Loan

Required: Prepare the operating activities section of the statement of cash flows using indirect method.                                                                                                                  

2. The balance sheet of Fahmy plc. shows the following information in its assets and liability and equity section:

Assets	$
Non-current assets	250,000
Current assets	100,000
Total Assets	350,000
Liabilities and Equity
Total Liabilities	100,000
Equity:
Share capital : ordinary shares of $ 5 each	125,000
Reserves :  Share premium	25,000
Reserves : Retained earnings	100,000
Total Liabilities and Equity	350,000

 

Fahmy Plc. Needs to raise more cash and decided to make 1 for 2 rights issue, fully paid in cash at a price $7 per share.

Required:

Show by using detailed workings the effect on the balance sheet accounts of the rights issue.