Comparative partial balance sheet Income statement Details 2019 2020 Sales 250,000 cash 48,000 54,000 Deduct: cost of goods sold (100,000) Account Receivable 68,000 60,000 Gross Profit 150,000...






















































































Comparative partial balance sheet




Income statement




Details




2019




2020



Sales



250,000



cash



48,000



54,000



Deduct: cost of goods sold



(100,000)



Account Receivable



68,000



60,000



Gross Profit



150,000



Inventory



112,000



110,000



Deduct: Administrative and selling expenses (including 15,000 dinars depreciation of equipment)



(68,000)



Prepaid Expenses



8,000



10,000



Long-term Investment



60,000



62,000



Income from operations



82,000



equipment



127,000



181,000



Gains from equipment sales are added



7,000



loan bonds



30,000



27,000



Deduct:  Interest Expense



(9,000)



Account Payable



87,000



75,000



net income before tax



80,000



checks



8,000



12,000



Subtract: income tax (20%)



(16,000)



Income tax payable



9,000



8,000



net income



64000





additional information:


1- Accounts receivable relate to sales, creditors’ accounts relate to the cost of goods sold, prepaid expenses relate to administrative and selling expenses, and the total depreciation of property and equipment is (15,000) dinars.


2- The Manama Company had sold equipment costing (17,500) dinars and its depreciation complex (12,000) dinars for (12,500) dinars, and interest banks for this year at 5% for a long-term loan amounting to (180,000) dinars.


Required:


First: Use your specialized skills to apply accounting principles. Help the management of Al-Manama Trading Company in preparing the statement of cash flows according to the direct method, explaining to it how to extract the amounts.


Second: The direct method for preparing the statement of cash flows differs from the indirect method. Required: Using your critical skill in solving problems related to measurement, recognition, and disclosure of elements of financial statements. Compare only the differences between the methods of preparing the statement of cash flows.



Third: The cash flow statement provides businessmen with the opportunity to assess the profitability of the company. Required: Using your critical skill in showing insight and interpretation in solving problems, evaluate the profitability of Al-Manama Trading Company and its ability to meet its obligations to investors and creditors according to what is reflected in the company's cash flow statement and compare it with the industry standard of profitability, which is (98%).

Jun 08, 2022
SOLUTION.PDF

Get Answer To This Question

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here