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QUESTION 2 Item 2018 (RM) 2019 (RM) Sales 4,203 4,507 Cost of Goods Sold ...

QUESTION 2
Item 2018 (RM) 2019 (RM)
Sales 4,203    4,507
Cost of Goods Sold    2,422    2,633
Depreciation 785    952
Interest 180    196
Dividends 225    250
Current assets 2,205    2,429
Net fixed assets 7,344    7,650
Current liabilities 1,003    1,255
Long-term debt 3,106    2,085
Tax 35%   35%

Data above are extraction of accounting information for Goldie Berhad. Based on the
information given, answer the following question:
(a) Construct an income statement for the year of 2019.
(b) Compute Cash flow from assets (include OCF, NCS and change in NWC) for the year of 2019.
(c) Compute Cash flow to creditors for the year of 2019.

Solutions

Expert Solution

(A) Income statement for the year 2019

Sales. $ 4507

Less: COGS. $ 2633

Less: Deprecuation. $ 952

= EBIT. $ 922

Less: Interest. $ 196

= EBT. $ 726

Less: Tax @35% $ 254

= EAT/ Net profit. $ 472

Out of this $ 472 , dividend is $250 and retained earnings are $ 222

Payment of long term debt = $ 3106 - $2085 = $1021

Payment of interest = $ 196

Total cash outflow to creditors = $ 1021 + $ 196 = $ 1217

(B) operating cash flows:

EBIT = $ 922

Add: Depreciation. = $ 952

Less : Tax. = $ 254

Operating cash flow = $ 1620

Calculation of net capital spendings :

Closing FA = $ 7650

Less : Opening FA. = $ 7344

Add: Depreciation. = $ 952

= Net capital spendings = $ 1258

Calculation of change in working capital :

Closing working capital. = $ 1174

Less: opening working capital = $ 1202

= change in working capita . = ( $ 28 )

Cash flow from Assets:

Operating cash flows = $1620

Less: net capital spendings = $ 1258

Less: change in working capital = ($ 28 )

Cash inflow from assets = $ 390

ekkarill92 answered 1 year ago

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