Part A

Stapular Garment Enterprise (SGE) is a retailer operating in Kulim, Kedah. SGE uses the perpetual inventory method. Assume there are no credit transactions; all amounts are settled in cash. You are provided with the following information for SGE, for the month of January 2020.

January 1 Opening inventories 160 units @ RM20.00

January 2 Purchase 100 units @ RM22.00

January 6 Sale 180 units @ RM40.00

January 9 Purchase 75 units @ RM24.00

January 10 Sales 50 units @ RM45.00

January 23 Purchase 100 units @ RM25.00

January 30 Sale 130 units @ RM48.00

Required:

Determine the cost of goods sold and the ending inventory using;

1) FIFO (First in, first out)

2) LIFO (Last in, first out)

Part B

The comparative balance sheets for Subutay Company Sdn. Bhd. appear below:

Subutay Company Sdn. Bhd.

Comparative Balance Sheet

2019 2018

Assets

Cash RM38,000 RM13,000

Account receivable 18,000 14,000

Inventory 25,000 15,000

Prepaid insurance 7,000 9,000

Stock investments 0 18,000

Equipment 60,000 30,000

Accumulated depreciation

Equipment (18,000) (14,000)

Total Assets 130,000 85,000

Liabilities and Stockholder's equity

Account payable 25,000 7,000

Bonds payable 37,000 45,000

Common stock 40,000 23,000

Retained earnings 28,000 10,000

Total liabilities and

stockholder's equity 130,000 85,000

Additional information:

1. Net income for the year ending December 31, 2019, was RM30,000. 2. Cash dividends of RM12,000 were declared and paid during the year. 3. Stock investments that had a book value of RM18,000 were sold for RM13,000. 4. Sales for 2019 are RM130,000.

Required:

Prepare a statement of cash flows for 2019 using the indirect method