The Income Statement for the year ended 30 June, 2020 of Alpha Pharmaceutical Company is presented...
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The Income Statement for the year ended 30 June, 2020 of Alpha Pharmaceutical Company is presented as under: Income Statement for the year ended 30.06.2020 Sales revenues Less Cost of goods Sold Gross income Less operating expenses: Staff Salaries expenses Selling Staff Commission expenses Rent and utility expenses Depreciation expenses Bad debt expenses Net income before tax Less Income Tax Net Income after tax The comparative balance sheet for two years is as under: Assets Cash Accounts Receivables Inventories Prepaid expenses of rent Plant and machinery Accumulated depreciation Motor vehicle Accumulated depreciation Total Liabilities and Equity Accounts Payable Salaries Payable Long term Notes Payable Capital Stocks Retained Earnings Total Rs. 76,000 Rs. 15,000 Rs. 25,000 Rs. 25,000 Rs. 3,000 30-06-2019 Rs. 40.000 Rs. 305,000 Rs. 120,000 Rs. 30,000 Rs. 270,000 (Rs. 155,000) Rs. 100,000 (Rs. 40,000) Rs. 670,000 Rs. 125,000 Rs. 42.000 Rs. 160,000 Rs. 300,000 Rs. 43,000 Rs.670.000 Rs. 670,000 Rs. 345,000 Rs. 325,000 Rs. 144,000 Rs. 181,000 Rs. 54,300 Rs. 126,700 30-06-2020 Rs. 10,000 Rs. 300,000 Rs. 125,000 Rs. 42,000 Rs. 270,000 (Rs. 170,000) Rs. 100,000 (Rs. 50,000) Rs. 627,000 Rs. 62,300 Rs. 35,000 Rs. 160,000 Rs. 300,000 Rs. 69,000 Rs. 627,000 The analysis of the record reveals that the company paid the dividends amounting to Rs. 100,000 to shareholders. Required: 1) Prepare a cash flow statement for the year ended 30 June, 2020 under direct method. 2) 3) Prepare a cash flow statement for the year ended 30 June, 2020 under indirect method. Draw a comparison of the relevant sections of the cash flow statements prepared under (1) and (2) above and comment on any difference found in it. The Income Statement for the year ended 30 June, 2020 of Alpha Pharmaceutical Company is presented as under: Income Statement for the year ended 30.06.2020 Sales revenues Less Cost of goods Sold Gross income Less operating expenses: Staff Salaries expenses Selling Staff Commission expenses Rent and utility expenses Depreciation expenses Bad debt expenses Net income before tax Less Income Tax Net Income after tax The comparative balance sheet for two years is as under: Assets Cash Accounts Receivables Inventories Prepaid expenses of rent Plant and machinery Accumulated depreciation Motor vehicle Accumulated depreciation Total Liabilities and Equity Accounts Payable Salaries Payable Long term Notes Payable Capital Stocks Retained Earnings Total Rs. 76,000 Rs. 15,000 Rs. 25,000 Rs. 25,000 Rs. 3,000 30-06-2019 Rs. 40.000 Rs. 305,000 Rs. 120,000 Rs. 30,000 Rs. 270,000 (Rs. 155,000) Rs. 100,000 (Rs. 40,000) Rs. 670,000 Rs. 125,000 Rs. 42.000 Rs. 160,000 Rs. 300,000 Rs. 43,000 Rs.670.000 Rs. 670,000 Rs. 345,000 Rs. 325,000 Rs. 144,000 Rs. 181,000 Rs. 54,300 Rs. 126,700 30-06-2020 Rs. 10,000 Rs. 300,000 Rs. 125,000 Rs. 42,000 Rs. 270,000 (Rs. 170,000) Rs. 100,000 (Rs. 50,000) Rs. 627,000 Rs. 62,300 Rs. 35,000 Rs. 160,000 Rs. 300,000 Rs. 69,000 Rs. 627,000 The analysis of the record reveals that the company paid the dividends amounting to Rs. 100,000 to shareholders. Required: 1) Prepare a cash flow statement for the year ended 30 June, 2020 under direct method. 2) 3) Prepare a cash flow statement for the year ended 30 June, 2020 under indirect method. Draw a comparison of the relevant sections of the cash flow statements prepared under (1) and (2) above and comment on any difference found in it.
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Related Book For
Fundamental Managerial Accounting Concepts
ISBN: 978-0078025655
7th edition
Authors: Thomas Edmonds, Christopher Edmonds, Bor-Yi Tsay, Philip Old
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