Question

Question 1 The comparative data from the statement of financial position of Azam Berhad at 31 December, 2016 and 2017 are as follows. Comparative data on current assets and current liabilities at 31 December 2017 I 2017 2016 I RM RM Current Assets Inventories 454.500 ||490.200 Accounts receivable I 174.100 1190.750 Prepaid expenses 17.100 119.200 Cash and cash equivalents T136.500 17.550 Current Liabilities Accounts payable Short-term bank loan 11117,450 ||123.450 117.250 III.250 Statement of profit or loss for the year ended 31 December 2017 TIRM Sales Revenue ILON 1,000 Cost of goods sold 11585.000) Gross profit 1498,000 Depreciation expense |(36,600) Other expenses 192.850) 168 $50 Other gains Mosses): Loss on sale of 11 equipment (2.100) Profit before tax 166.450 Income tax expense |(9,450) Profit for the year The following transactions occurred during the year ended 31 December 2017: 1) Purchase of equipment amounted to RM143,000. Paid cash RM83,250 and signing a long-term loan note payable for the balance. 2) Sold equipment at RM30,150, for RM28,050 cash. 3) Declared and paid cash dividend of RM63,000. 4) The company issued ordinary shares for cash RM33,000. 5) The company took a short-term bank loan for RM6,000. Required: Prepare Statement of Cash Flows of Azam Berhad for the year ended 31 December 2017, in accordance to MFRS 107, using the indirect method to report operating activities.

Answer 1

Question 1 :

Azam Berhad Statement of Cash Flows For the year ended December 31, 2017
Cash flows from Operating Activities	$	$
Profit for the year		57,000
Adjustments to reconcile profit for the year to cash provided by operations
Depreciation expense	36,600
Loss on Sale of Equipment	2,100
Decrease in inventories	35,700
Decrease in accounts receivable	16,650
Decrease in prepaid expenses	2,100
Decrease in accounts payable	(6,000)
Increase in short term bank loan	6,000	93,150
Net cash flows from Operating Activities		150,150
Cash Flows from Investing Activities
Proceeds from Sale of Equipment	28,050
Cash paid to Purchase Equipment	(83,250)
Net Cash used in Investing Activities		(55,200)
Cash Flows from Financing Activities
Cash from issuance of common stock	33,000
Cash dividends paid	(63,000)
Net cash used in Financing Activities		(30,000)
Net increase in cash and cash equivalents		64,950
Cash and cash equivalents, December 31, 2016		71,550
Cash and cash equivalents, December 31, 2017		136,500