answer 4,5

Transcribed image text: INARINE Berhad's genetically engineered flowers have been rapidly gained market acceptance and shipment to customers has increased dramatically. However management notes that despite increasing profits, the cash balance has declined. You are hired to advice management as to specific causes of the cash deficiency and how to remedy the situation. You are given the following balance sheets of INRINE Berhad for Year 1 and Year 2 (RM"000) XYZ Company, Balance Sheet as at December 31, Year 2 and Year 1 Year 2 Year 1 Cash 500,000 640,000 Account Receivable (net) 860,000 550,000 Inventory 935.000 790,000 Prepaid expenses 25,000 Total current assets 2,320,000 1,980,000 Patents (net) 130,000 Plant and Equipment (net) 2,050,000 1,440,000 Other fixed assets (net) 170,000 150,000 Total assets 4,670,000 3,570,000 Account payable Deferred Income tax Other current liabilities Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity In addition, the following information is available 630,000 57,000 85,000 772.000 1,650,000 2,000,000 248.000 4,670,000 600,000 45,000 78,000 723 850,000 1,800,000 197.000 3,570,000 1. Net income for Year 2 is RM 160,000 and for Year 1 RM130,000 2. Cash dividends paid during Year 2 are RM109,000 and during Year 1 are RM100,000 3. Depreciation expenses charged to income during Year 2 is RM95,000 and the provision for bad debt (expense) is RM40,000. Expenses include cash payments of RM28,000 in interest costs and RM70,000 in income taxes. Assignment 4 4. During year 2, the company purchases patents for RM140,000 in cash. Amortization of patents during the year amounts to RM10,000. 5. Deferred income tax for Year 2 amounts to RM12,000 and for Year 1 it amounts to RM15,000. Required: a. Prepare a statement of cash flows for Year 2 using direct method b. Explain the difference between net income and cash flows from operations Transcribed image text: INARINE Berhad's genetically engineered flowers have been rapidly gained market acceptance and shipment to customers has increased dramatically. However management notes that despite increasing profits, the cash balance has declined. You are hired to advice management as to specific causes of the cash deficiency and how to remedy the situation. You are given the following balance sheets of INRINE Berhad for Year 1 and Year 2 (RM"000) XYZ Company, Balance Sheet as at December 31, Year 2 and Year 1 Year 2 Year 1 Cash 500,000 640,000 Account Receivable (net) 860,000 550,000 Inventory 935.000 790,000 Prepaid expenses 25,000 Total current assets 2,320,000 1,980,000 Patents (net) 130,000 Plant and Equipment (net) 2,050,000 1,440,000 Other fixed assets (net) 170,000 150,000 Total assets 4,670,000 3,570,000 Account payable Deferred Income tax Other current liabilities Total current liabilities Long-term debt Common stock Retained earnings Total liabilities and equity In addition, the following information is available 630,000 57,000 85,000 772.000 1,650,000 2,000,000 248.000 4,670,000 600,000 45,000 78,000 723 850,000 1,800,000 197.000 3,570,000 1. Net income for Year 2 is RM 160,000 and for Year 1 RM130,000 2. Cash dividends paid during Year 2 are RM109,000 and during Year 1 are RM100,000 3. Depreciation expenses charged to income during Year 2 is RM95,000 and the provision for bad debt (expense) is RM40,000. Expenses include cash payments of RM28,000 in interest costs and RM70,000 in income taxes. Assignment 4 4. During year 2, the company purchases patents for RM140,000 in cash. Amortization of patents during the year amounts to RM10,000. 5. Deferred income tax for Year 2 amounts to RM12,000 and for Year 1 it amounts to RM15,000. Required: a. Prepare a statement of cash flows for Year 2 using direct method b. Explain the difference between net income and cash flows from operations