Preparation of Adjusted Profit and Loss Account
Comparison of Current items to determine the inflow of cash or outflow of cash
Preparation of cash flow statement
The cash flow statement can be prepared either in statement form or in accounting format.
From the following balances you are required to calculate cash from operations:
According to net profit method, the cash from operation has to be found out Cash from operations
= Net profit (+)decrease in current assets-Increase in current assets
The next step is to quantify the decrease in current assets and increase in current liabilities, in order to add with the closing net profit of the given statements and then the added volume should be deducted from the increase in current assets and decrease in current liabilities.
From the following profit and loss account you are required to compute cash from operations
The comparative balance sheets of M/s Ram Brothers for the two years were as follows
The next step is to find out the depreciation provided during the year, which affects non current asset account of the firm is Machinery account.
Before discussing the accounting transactions, the journal entry for provision for depreciation should be known.
Cash sale of the machinery amounted Rs.26,000
What happens during the cash sale of a machinery ?
Debit what comes in - Cash resources are coming in
Credit what goes out- Machinery is going out of the firm
While selling the machinery, it is most important to identify the worth of the sale transaction of the machinery ?
Once the loss of the transaction is found out, the amount of the loss should be appropriately recorded
The next step is to prepare adjusted profit and loss account
The next most important step is to compare the current assets
Increase in creditors -Rs.20,000 - cash inflow
Loan from SBI -Rs 50,000 -cash inflow
Decrease in stock -Rs.10,000 - cash inflow
Loan repaid -Rs.1,20,000 -cash outflow
Decrease in Bill payable -Rs.20,000 - cash outflow
Data ltd, supplies you the following balance on 31st Mar 1995 and 1996
The first step is to prepare non current accounts
The first step is to prepare non current assets and liabilities account
As far as non current asset account - Land account has to be prepared
The non current liability account to be prepared.
The first non current liability account got affected is Share capital account.
The next non current liability account is that Bonds account.
The next most important step is to compare the current assets during the two years
Increase in Accounts payable - Rs. 2,960 - Cash inflow
Decrease in Inventories -Rs. 7,000 - Cash inflow
Increase in Bank Balance - Rs. 2,400 -Cash outflow
Increase in accounts receivable -Rs. 5,600 - Cash outflow
The next step is to draft the Cash flow statement
Accounts and Finance for Managers Related Tutorials
Accounts And Finance For Managers Tutorial
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Fund Flow Statement Analysis
Cash Flow Statement Analysis
Cost Accounting & Preparation Of Cost Statement
Time Value Of Money
Sources Of Long Term Finance
Capital Market Developments In India
Indian Financial System
Sebi In Capital Market Issues
Risk And Return
Cost Of Capital
Capital Structure Theories
Working Capital Management
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