$ $ for 2009 (Direct Method) for 2009 (Indirect Method)
Assets Cash flow from operating activities Reconciliation of net profit and cash Cash at Bank 45,000 55,000 Cash receipts from customers flow from operating activities Government Bond 5,000 10,000 Cash paid to suppliers net profit Prepayment-Insurance 1,000 1,500 Cash paid to employees Adjusting for: Accounts Receivable 7,600 8,000 Interest expense AR Inventory 4,800 5,600 Total Prepayment Land 100,000 100,000 Inventory Building 50,000 50,000 CF-investing AP Accumulated Depreciation - Building -10,000 -11,000 Government bond Accrued wages Photocopier 5,000 0 Sale of motor van Add back: Accumulated Depreciation - photocopier -2,000 0 interest received Dep'n expense 206,400 219,100 Total Loss on sale of copier deduct interest income Liabilities & Equity CF-Financing CF-Operating Accounts Payble 4,700 6,800 New issue of shares Accrued wages 3,000 4,000 dividends paid CF-investing Long-term Loan 130,000 80,000 Repay loans Government bond Equity 68,700 128,300 Total Sale of motor van 206,400 219,100 interest received Cash Bal b/d 0 Total cash inflow/outflow Income Statement for 2009 Cash Bal c/d CF-Financing $ $ New issue of shares Sales revenue 142,400 dividends paid Less Cost of Goods Sold 40,500 Repay loans Gross Profit 101,900 0 Photocopier reconciliation Add other income: interest received 200 Cost 5000 Cash Bal b/d 45,000 Less other expenses Dep'n 2000 Total cash inflow/outflow Interest expense 10,000 Carrying 3000 Cash Bal c/d Loss on sale of motor van 1,000 Proceed 2000 Depreciation of photocopier 500 Loss on sale -1000 Depreciation of building 1,000 Wages 27,000 Insurance expense 8,000 Other information Other expenses 10,000 57,500 Dividends paid 5000 Net Profit 44,600 issue of New shares by cash 20,000