Financial Accounting Introduction 3 Exercises

Financial Accounting

Table of Contents
Introduction......................................................................................................................................3
Exercise 1.........................................................................................................................................3
Question 1....................................................................................................................................3
Question 2....................................................................................................................................4
Exercise 2.........................................................................................................................................4
Question 1....................................................................................................................................4
Question 2....................................................................................................................................6
Question 3....................................................................................................................................6
Exercise 3.........................................................................................................................................7
Question 1....................................................................................................................................7
Question 2....................................................................................................................................8
Question 3....................................................................................................................................9
Analysis...........................................................................................................................................9

Introduction
In this assignment different type’s statement has to be prepared such as statement of cash
outflow and cash inflow, statement of equity return, statement showing the equity section. The
analysis of this statement has also been carried out in this assignment. Different calculation has
been done such as calculation of basic EPS and diluted EPS. The impact of the short term and
long term investment has also been analyzed in this assignment.
Exercise 1
Question 1
XYZ Corporation
Statement of Cash outflow and inflow
For the Year 2019
Indirect Method
Particulars Amount
A. Cash outflow and inflow- Operating
Net Profit 66,000.00
Add/Less: Adjustments to reconcile net profit
Depreciation-building 4,800.00
Depreciation-equipment 10,800.00
Patent amortization 3,000.00
Loss on disposal of equipment 2,400.00
Add/Less: Changes- current liabilities and current assets
Increase-current assets 34,800.00
Increase-current liabilities (15,600.00)
Cash outflow & inflow-Operating (A): 106,200.00
B. Cash outflow and inflow-Investing
Addition to building (32,400.00)
Disposal of equipment 12,000.00
Cash outflow and inflow -Investing (B): (20,400.00)

C. Cash outflow and inflow-Financing Activities
treasury shares-purchase (13,200.00)
Payment of Cash dividend (36,000.00)
Issue of bonds at par 60,000.00
Cash outflow and inflow- Financing (C): 10,800.00
Net increase in cash & cash equivalents (A+B+C) 96,600.00
Add: Cash balance as on 31st December 2018 100,000.00
Cash balance as on 31st December 2019 196,600.00
Question 2
Calculation of Equity Return
Particulars Amount
A. Net Profit 66,000.00
B. Share Capital 216,000.00
C. Retained Earnings 52,800.00
D. Shareholders' Equity 268,800.00
E. Equity Return (A/D) 0.25
Exercise 2
Question 1
ABC
Statement Showing Equity Section
As On 31st December, 2018