Question

National Foods Pvt. Ltd. is a company producing canned foods. Below are the company’s financial statements:

National Foods Pvt. Ltd.
Statement of Comprehensive Income for the year ended 31 August 2018
						RM
	Sales revenue					2,700,000
	Cost of goods sold					(900,000)
	Gross profit					1800,000
	Operating Expenses Administration & Distribution expenses					(195,000)
	Depreciation expense					(30,000)
	Other operating expense					(150,000)
	Interest expense					(135,000)
	Net profit before tax					1,290,000
	Income tax expense					(240,000)
	Net income					1,050,000
National Foods Pvt. Ltd.
Statement of Financial Position as at 31 August 2018
		2017			2018
		RM		RM	RM		RM
Non-current Assets
Van		600,000			900,000
(-)Accumulated depreciation		(120,000)		480,000	(150,000)		750,000
Current Assets
Bank				825,000			1,186,500
Debtors				300,000			150,000
Inventory				75,000			90,000
Total Assets				1,680,000			2,176,500
Non-current Liabilities
Loan				480,000			630,000
Current Liabilities
Creditors				90,000			135,000
Operating expenses payable				31,500			33,000
Shareholders’ Equity
Ordinary share capital				478,500			478,500
Retained earnings				600,000			900,000
Total Liabilities & Equities				1,680,000			2,176,500

Required:

Prepare the statement of cash flows for Hasniza Foods Pte. Ltd. for the year ended 31 August 2018 using the direct method. (Show all calculations).                    

Answer 1

STATEMENT OF CASH FLOWS (DIRECT METHOD)
Cash flows from operating activities:
Receipts from customers	2850000
Payment for purchases	-870000
Payment for operating expenses (31500+195000+150000-33000)	-343500
Interest paid	-135000
Income tax paid	-240000
Net cash from operating activities		1261500
Cash flows from investing activities:
Purchase of van	-300000
Net cash used by investing activities		-300000
Cash flows from financing activities:
Loan taken	150000
Dividends paid	-750000
Net cash from financing activities		-600000
Increase in caah and cash equivalents		361500
Beginning balance of cash and cash equivalents		825000
Ending balance of cash and cash equivalents		1186500
WORKINGS:
Receipts from customers:
Net sales	2700000
Add: Beginning balance of accounts receivable	300000
Less: Ending balance of accounts receivable	150000
Receipts from customers	2850000
Payment for purchases:
Cost of goods sold	900000
Add: Beginning balance of creditors	90000
Less: Ending balance of accounts payable	135000
	855000
Add: Ending balance of inventory	90000
Less: Beginning balance of inventory	75000
Payment for purchases	870000
Dividend paid:
Beginning balance of retained earnings	600000
Add: Net income for the year	1050000
Total	1650000
Less: Ending balance of retained earnings	900000
Dividend paid	750000