Financial Statement Analysis

Essay by surenramzUniversity, Bachelor'sA, September 2013

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Additional question

You are given the following information

initial investment RM1,100

Purchased 100 pieces of plain T shirt with cash each RM15 per pieces.

Paid Variable Printing Cost with cash RM5 per shirt.

Sold 30 chairs at RM30 each for cash

Sold 30 chairs at RM30 each on credit


a) Based on cash accounting, prepare the simple statement of cash flow and balance sheet

b) Based on accrual accounting, prepare the simple income statement and balance sheet

a) Cash Accounting

Receipts Assets

T shirts $900 Cash $0


Plain T shirt $1500 Equity

Printing cost 500 Beginning Equity $1100

Total payments $(2000) Less net cash outflow (1100)

Net cash outflow $(1100) Total equity $0

b) Accrual Accounting

Revenues Assets

T shirts $1800 Cash 0

T-Shirt inventory 800

Expenses Receivables 900

Plain T shirt $900 Total assets 1700

Printing cost 300


Total expenses (1200) Beginning equity 1100

Add net income 600

Net income $600 Total equity 1700