Calculations Assignment Example | Topics and Well Written Essays - 1500 words

Calculations - Assignment Example352,000 Purchases ?150,000 Opening Inventory ?65,000 Cost of Goods on tap(predicate) for Sale ?215, 000 Less Closing inventory ?70, 000 Cost of Goods Sold ?145, 000 Gross Profit ?207, 000 Property depreciation (5% using straight line method) ?5100 Plant and equipment depreciation (20% ) ?19500 Distribution cost ?58,000 Dividends paid ?12, 000 Administrative expenses outstanding ?4,500 Less distribution costs prepaid ?10, 000 hail Expenses ?77100 Net Profit before Tax ?129900 union tax (22%) ?17500 Net Income ?112,400 c) Statement of financial position Julyfest Limited Balance Sheet for the year ended 31st May 2012 ASSETS Current Assets Inventory 70,000 hard cash and cash equivalents 63,500 Account Receivables 87,000 Prepaid distribution cost 10,000 Total Current Assets 230,500 Fixed Assets Property 102,000 Cost of plant and equipment 98,000 Less Accumulated Depreciation 30,000 Total Fixed Assets 170,000 TOTAL ASSETS 400,500 LIABILITIES Current Li abilities Trade payables 37,000 Interest Unpaid Bond 6,500 Taxes 17,500 Purchases 150,000 SHAREHOLDERS uprightness Equity sh ars 100,000 Retained Profits 59,500 Share premium 30,000 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 400,500 Task Two Statement of cash flows provides important information to those using it as it provides information about the out flows and inflows that have taken place in a certain financial year or within a circumstantial period of time (Baker 2005). The main importances of statement of cash flow are as discussed below. First statement of cash flows enables utilisers to identify as well as understand the sources from which the funds determinationd in the business during a specific period as the uses into which these funds were used (Philips 2008). Other financial statements much(prenominal) as balance sheet and trial balances are not able taper sources of funds as well uses into which these finances were put into use (Baker 2005). Statement of cash flow also plays an important role in enhancing management of businesses as well as management of business resources (Baker 2005). It also enhances planning of business funds as well as ensuring that business cash flows (outflows and inflows) conform to apiece other (Tailor 2003). This is as opposed to other financial statements such as balance sheet which only shows assets and liabilities of business. Balance sheet cannot account for both cash outflows and cash inflows. Another importance of statement of cash flow is that it shows how efficient an organization is able to generate income (cash inflows) from its operation (Baker 2005). Other financial statements such as balance sheet which only shows assets and liabilities of business but cannot show shows how efficient an organization is able to generate income (cash inflows) from its operation (Philips 2008). Another importance of cash to those whose use it is that it is a report of funds that have been used during a specific period of time for various business activities (both short term and long term) such organizations long term investment (Baker 2005). This information can also be shown by balance sheet. Another importance of cash to those whose use it is that it is a report of funds that have been received by the business during a specific period of time from various business activities such as debentures, share issue and loans among others (Baker