Question
A partial balance sheet for orange company is presented below. Orange Company Income statement For the year Ended December 31, 2019 Sales $7,528 Cost of
- A partial balance sheet for orange company is presented below.
Orange Company Income statement For the year Ended December 31, 2019 | ||
Sales |
| $7,528 |
Cost of goods sold |
| 1,100 |
Gross Profit |
| $6,428 |
Operating expenses: |
|
|
Salaries | $2250 |
|
Depreciation expense | 900 |
|
Miscellaneous | 1,278 | (4,428) |
Net Income |
| $2,000 |
Orange Company Balance Sheet As at 31st December 2019 | ||
2017 | 2018 |
|
$800 | $500 | Cash |
500 | 350 | Account receivable |
2,400 | 2,800 | Inventories |
250 | 250 | Prepaid expenses |
3,150 | 4,500 | Furniture |
6,500 | 7,000 | Accounts Payable |
600 | 500 | Salaries Payable |
2,000 | 2,200 | Short term Bank Loan |
Required: Prepare the operating activities section of the statement of cash flows using indirect method. (15 Marks)
- The balance sheet of Fahmy plc. shows the following information in its assets and liability and equity section:
Assets | $ |
Non-current assets | 250,000 |
Current assets | 100,000 |
Total Assets | 350,000 |
|
|
Liabilities and Equity |
|
Total Liabilities | 100,000 |
Equity: |
|
Share capital : ordinary shares of $ 5 each | 125,000 |
Reserves : Share premium | 25,000 |
Reserves : Retained earnings | 100,000 |
Total Liabilities and Equity | 350,000 |
|
|
Fahmy Plc. Needs to raise more cash and decided to make 1 for 2 rights issue, fully paid in cash at a price $7 per share.
Required:
Show by using detailed workings the effect on the balance sheet accounts of the rights issue.
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