Statement of Cash Flow -Prominent Sdn BhdStatement of Cash FlowFor the Year Ended September 30, 2022Cash Flow from Operating Activities: Profit before interest and taxes 65,500 Adjustments for non cash Items: Depreciation Expenses9,800 Loss on Sale of an Assets70010,500 Changes in Working Capital: Increase in Inventory(8300) Decrease in Trade Receivable2,600 Increase in Trade Payable1,400(4300) Cash Flow from Operations 71,700Less: Tax Paid (15700)Less: Interest Paid (2000) Net Cash Flow from Operating Activities 54,000 Cash Flow from Investing Activities: Sale of an Assets3,500 Net Cash Flow from Investing Activities 3,500 Cash Flow from Financing Activities: Dividend Paid(34800) Issuance of Share Capital18,000 Repayment of Bank Loan(32000) Net Cash Flow from Financing Activities (48800) Net Change in Cash 8,700 Cash Balance, Beginning 8,600Cash Balance, Ending 17,300Explain why profit should be reconciled to net operating cash flows. Give examples fromthis question to explain your answer. Less Provision for bad (1.700)debtsNet trade receivables37,400(1,400)34,8004. The current tax payable at 30 September 2021 was paid in May 2022.5.The proposed dividend for the year 30 September 2023 is RM29,600 and the proposeddividend for the year 30 September 2022 was RM34,800. If approved at the annualgeneral meeting (AGM), the dividend is paid for immediately. The AGM is usually heldthree months after the reporting period end date (i.e., 30 September).6. During the year, 10,000 shares were issued at RM1.80 per share.7. Profit before interest and taxes for the year ended 30 September 2022 is RM65,500. The following are the statements of financial position (balance sheet) of Prominent Sdn Bhdas at 30 September 2021 and 30 September 2022.ASSETSNon-current assetsProperty, plant and equipment at costLess Accumulated depreciationProperty, plant and equipment (Net)Total non-current assetsCurrent assetsInventoryTrade receivablesCash and bankTotal current assetsTotal assetsEQUITY AND LIABILITIESEquityShare capitalGeneral reserveRetained earningsTotal equityNon-current liabilitiesBank Loan (10%)Total non-current liabilitiesCurrent liabilitiesTrade payablesCurrent tax payableTotal current liabilitiesTotal liabilitiesTotal equity and liabilities3. Trade receivables are made up of the following:30Sept 302021RM39,10030 Sept 2021 30 Sept 2022RMRMTrade receivables173,000(46,000)127,000127,0002022RM36,20048,40037,4008,60094.400221,40068,0006,40047,900122.30052,00052.00031,40015.70047,10099,100221.400165,000(52,000)113,000113,000Sept56,70034,80017,300108,800221,80086,0009,60054,900150.500Additional information1. Non-current assets that cost RM8,000 and had a written down value (i.e., cost lessaccumulated depreciation) of RM4,200 were disposed of during the year ended 30September 2022 at a price of RM3,500. There were no other acquisitions or disposals ofnon-current assets during the year.20,00020.0002. Total depreciation on non-current assets for the year ended 30 September 2022 wasRM9,800.32,80018,50051,30071,300221.800

Profit is reconciled to Net operating cash flows to determine the actual cash flows from operations.…

Answered: Explain why profit should be reconciled…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 36BE: Analyzing Fixed Assets Pitt reported the following information for 2018 and 2019: Required: Compute...

See similar textbooks

Related questions

Question

Statement of Cash Flow -

Prominent Sdn Bhd
Statement of Cash Flow
For the Year Ended September 30, 2022
Cash Flow from Operating Activities:
Profit before interest and taxes		65,500

Adjustments for non cash Items:
Depreciation Expenses	9,800
Loss on Sale of an Assets	700	10,500

Changes in Working Capital:
Increase in Inventory	(8300)
Decrease in Trade Receivable	2,600
Increase in Trade Payable	1,400	(4300)

Cash Flow from Operations		71,700
Less: Tax Paid		(15700)
Less: Interest Paid		(2000)

Net Cash Flow from Operating Activities		54,000

Cash Flow from Investing Activities:
Sale of an Assets	3,500

Net Cash Flow from Investing Activities		3,500

Cash Flow from Financing Activities:
Dividend Paid	(34800)
Issuance of Share Capital	18,000
Repayment of Bank Loan	(32000)

Net Cash Flow from Financing Activities		(48800)

Net Change in Cash		8,700

Cash Balance, Beginning		8,600
Cash Balance, Ending		17,300

Explain why profit should be reconciled to net operating cash flows. Give examples from
this question to explain your answer.

Less Provision for bad (1.700)
debts
Net trade receivables
37,400
(1,400)
34,800
4. The current tax payable at 30 September 2021 was paid in May 2022.
5.
The proposed dividend for the year 30 September 2023 is RM29,600 and the proposed
dividend for the year 30 September 2022 was RM34,800. If approved at the annual
general meeting (AGM), the dividend is paid for immediately. The AGM is usually held
three months after the reporting period end date (i.e., 30 September).
6. During the year, 10,000 shares were issued at RM1.80 per share.
7. Profit before interest and taxes for the year ended 30 September 2022 is RM65,500.

The following are the statements of financial position (balance sheet) of Prominent Sdn Bhd
as at 30 September 2021 and 30 September 2022.
ASSETS
Non-current assets
Property, plant and equipment at cost
Less Accumulated depreciation
Property, plant and equipment (Net)
Total non-current assets
Current assets
Inventory
Trade receivables
Cash and bank
Total current assets
Total assets
EQUITY AND LIABILITIES
Equity
Share capital
General reserve
Retained earnings
Total equity
Non-current liabilities
Bank Loan (10%)
Total non-current liabilities
Current liabilities
Trade payables
Current tax payable
Total current liabilities
Total liabilities
Total equity and liabilities
3. Trade receivables are made up of the following:
30
Sept 30
2021
RM
39,100
30 Sept 2021 30 Sept 2022
RM
RM
Trade receivables
173,000
(46,000)
127,000
127,000
2022
RM
36,200
48,400
37,400
8,600
94.400
221,400
68,000
6,400
47,900
122.300
52,000
52.000
31,400
15.700
47,100
99,100
221.400
165,000
(52,000)
113,000
113,000
Sept
56,700
34,800
17,300
108,800
221,800
86,000
9,600
54,900
150.500
Additional information
1. Non-current assets that cost RM8,000 and had a written down value (i.e., cost less
accumulated depreciation) of RM4,200 were disposed of during the year ended 30
September 2022 at a price of RM3,500. There were no other acquisitions or disposals of
non-current assets during the year.
20,000
20.000
2. Total depreciation on non-current assets for the year ended 30 September 2022 was
RM9,800.
32,800
18,500
51,300
71,300
221.800

Expert Solution

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Explain why profit should be reconciled to net operating cash flows. Give examples from this question to explain your answer.