Practice Set2 DLC 1B a statement of cash flows the direct ABC Ind Balance Sheets

Question

Practice Set2 DLC 1B a statement of cash flows the direct ABC Ind Balance Sheets 12/31/2016 Make reasonable a 1231/2017 ABC In 19,65869 12 mos endin 12/31/2017 Accounts Receivable, net Sales 22,000,000 13,200,000 Machinery and 800,000 Furniture and Fix 2900.000) 3,300,000 155,000 825,000 Tetal Assets 5,280,000 and Shareholders Net Income 3,520,000 vidends Payable and were purchased for cash 00,000 376.000 60,000 100,000 shares of common stock sold for $10 per share Total current liabilities h dividends of $150,000 were declared Term Liabilities 2756 298 2,756295 132 295 Share PE ratio the stock s 536 Owner's and the shares are 100,000 in 2017 Deficit) ute the current ratio 20,066.000 5,264,295 Tetal Liab &Stek; hldrs' Equty 000.000.00 entnies for the issuance of S10,000,000 1%, 10 ssued an 1/1 af this atan effective rate of 12% s on 7/1 and 1 has 300,000 shares of S100 and 3,000.000 shares of $1 There are 400,000 shares of before interest and tax is $6,200,.000 Interest expense was S600 000 and the tax rate is 20% The and wishes fotal of $2 000,000 in dividends How much wi esch share af Retained earnings at the What wiW be the final amount in retained e what are of the are $90,000,000 at the end of the

Explanation / Answer

Answer 1 -

Answer 2 -

Answer - 3

Answer - 4

Statement of Cash Flows as on 31/12/2017 Cash flows from operating activities Profit before taxation     43,45,000.00 Adjustments for: Depreciation     11,55,000.00 Working capital changes: Workings (Increase) / Decrease in trade and other receivables       2,10,000.00 (Increase) / Decrease in inventories          40,000.00 Income taxes paid Dividends paid (Increase) / Decrease in prepaid expenses           -9,600.00 Opening balance            3,00,000.00       1,20,000.00 Increase / (Decrease) in trade payables          50,000.00 During the year            8,25,000.00       1,50,000.00 Increase / (Decrease) in Accrued Liabilities         -60,000.00 Closing Balance            3,60,000.00       1,32,000.00 Cash generated from operations     57,30,400.00 Outflow            7,65,000.00       1,38,000.00 Income taxes paid      -7,65,000.00 Dividends paid      -1,38,000.00 Net cash from operating activities     48,27,400.00 Cash flows from investing activities Opening balance          54,00,000.00 Purchase ofMachinery, equipment and computer      -4,05,000.00 Closing Balance          58,05,000.00 Net cash used in investing activities     (4,05,000.00) Outflow            4,05,000.00 Cash flows from financing activities Proceeds from issue of share capital     10,00,000.00 Net cash used in financing activities     10,00,000.00 Net increase in cash and cash equivalents     54,22,400.00 Cash and cash equivalents at beginning of period 1,42,36,295.00 Cash and cash equivalents at end of period 1,96,58,695.00 Cash Balance Control Total                       -  

Answer 2 -

a EPS Net Income          35,20,000.00 Less: Dividend           -1,50,000.00          33,70,000.00 Outstanding number of shares          11,00,000.00 EPS                           3.06 b PE ratio Stock Price                         36.00 PE ratio Stock Price/ EPS 36/3.06                         11.75 c Current Ratio Current Assets       2,35,10,295.00 Current Liabilities          24,38,000.00 Current Assets/ Current Liabilities                           9.64

Answer - 3

2 Journal Entries Particulars Debit Credit 01-Jan Cash A/C $ 10,00,000.00 11% Semiannual Bond A/C $ 10,00,000.00 01-Jul Interest on 11% Semiannual Bond A/C $       55,000.00 Cash A/C $       55,000.00 01-Jan Interest on 11% Semiannual Bond A/C $       55,000.00 Cash A/C $       55,000.00

Answer - 4

No of Preference share         3,00,000.00 Dividend thereon for 2 years as it’s a cumulative preference share      18,00,000.00 Dividend/ share                       6.00 No of common stock      30,00,000.00 No of treasury common stock         4,00,000.00 No of outstanding common stock      26,00,000.00 remaining dividend after paying off prefrence share holders         2,00,000.00 Dividend/ share                       0.08 EBIT      62,00,000.00 Interest         6,00,000.00 Tax @20%      11,20,000.00 Profit after tax      44,80,000.00 Dividend declared      20,00,000.00      24,80,000.00 Reatined earnings at the beginning of the year 9,00,00,000.00 Add: Profit during the year after dividend      24,80,000.00 Reatined earnings at the end of the year 9,24,80,000.00 Earnings after preference dividend      26,80,000.00 No of outstanding common stock      26,00,000.00 EPS                       1.03

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