Question

how do I prepare an income statement and cash flow

Clipboard Font Alignment D34 =SUM(D32:D33) D S 6 Revenue 7 Opening Cash Balance $ $ 16,560.00 5,000.00 $ 21,560.00 $ $ $ 9 Total Revenue 10 Expenses: 11 Rent 12 Utility Expense 13 Salaries 14 Total Expense 15 Earnings Before Tax 16 17 Taxes 18 Net Earnings 19 He Sheet1 Sheet2 Ready 3,900.00 300.00 9,360.00 13,560.00 8,000.00 $ 2160 7,985.00 $ Sheet3 e

using this information how do I calculate the cash flow

How to calculate the operating Cash Flow using the information given

Answer 1

Income statement

Particulars	$	$
Revenue		16,560
Less: cost of goods sold		nil
Gross profit		16,560
Less: operating expenses :-
Rent	3,900
Utility expenses	300
Salaries	9,360
Total operating expenses		13,560
Operating profit ( gross profit - total operating expenses)		3,000
Less: non operating expenses		Nil
Earning before tax		3,000
Less: tax paid		2,160
Earning after tax or Net income		840

Note : calculation for net profit before tax :-

Particulars	$
Cash flow from operating activities :-
Net profit after tax	840
Add: Retained earnings	7,985
Add: Provision for taxation current year	2,160
Net profit before tax	10,985

Cash flow statement showing net cash flow from operation

Particulars	$
Cash flow from operating activities :-
Net profit before tax ( see note before )	10,985
Add : non operating and non cash expenditure	nil
Less: non operating income	nil
Operating profit before working capital changes	10,985
Adjustment : changes in working capital	nil
( because no previous years data available)
Cash generated from operation	10,985
Less: tax paid	2,160
Net cash flows from operating activities	8,825