MAVUNO LIMITED

BALANCE SHEETS AS AT 31 DECEMBER

2010 2009

Sh. Sh.

Assets

Cash 134,200 154,300

Accounts receivable 203,200 189,700

Inventories 267,900 243,700

Investments 110,000

Land 140,000

Equipment 290,000 210,000

Accumulated depreciation (112,300) (93,400)

923,000 814,300

Liabilities & Stockholders Equity

Accounts Payable 192,100 175,400

Accrued expenses 12,400 14,600

Dividends payable 32,100 30,400

Share capital 10,000 8,000

Share premium 180,000 100,000

Retained Earnings 496,400 485,900

923,000 814,300

MAVUNO LIMITED

Profit & Loss account for the period ended 30 December 2010

Sales 965,000

Less cost of sales 503,200

Gross profit 461,800

Operating expenses

Depreciation 18,900

Other expenses 258,300 277,200

Operating income 184,600

Gain on sale of investment 22,000

Income before tax 206,600

Tax expense (69,400)

Net Income 137,200

Additional examination

• Equipment and land were acquired for cash.
• There were no disposals of equipment during the year.
• Investments was sold for Sh. 132,000
• Ordinary shares were issued for cash
• There was Sh.126,700 debit in retained earnings for cash dividends declared

Required

Prepare cash flow statement using indirect method