Question 4 Statement of profit or loss and statement of financial positions Green label Inc has the following balances on 31 December 2020 for their accounts Depreciation 250 Raw materials 300 Interest payments 20 Insurance 60 Prepayments made 80 Salaries and wages 130 Trade payables 120 Machine 600 Cash 200 Trade receivables 350 Sales revenues 850 Long term bonds 220 Finished goods 440 Prepayments received 80 Required Prepare a statement of financial positions for Green label Inc Start with calculating missing numbers (e g , missing account) if applicable Prepare a statement of profit or loss for Green label Inc Depreciation charges are included in the cash flow statement when firms prepare their statement using the indirect method, although depreciation charges are non cash effective and they are already included in the statement of profit or loss Explain why depreciation charges commonly appear in the indirect cash flow statement Refer hereby to the different types of adjustments within the indirect cash flow statement and how these adjustments are linked to accrual accounting Please type all the answer,thanks

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 06, 2024

Question 4: Statement of profit or loss and statement of financial positions

Green label Inc. has the following balances on 31 December 2020 for their accounts:

Depreciation: 250 Raw materials: 300

Interest payments: 20 Insurance: 60

Prepayments made: 80 Salaries and wages: 130 Trade payables: 120 Machine: 600

Cash: 200

Trade receivables: 350 Sales revenues: 850 Long-term bonds: 220 Finished goods: 440

Prepayments received: 80

Required:

Prepare a statement of financial positions for Green label Inc. Start with calculating missing numbers (e.g., missing account) if applicable.

Depreciation charges are included in the cash flow statement when firms prepare their statement using the indirect method, although depreciation charges are non-cash effective and they are already included in the statement of profit or loss. Explain why depreciation charges commonly appear in the indirect cash flow statement. Refer hereby to the different types of adjustments within the indirect cash flow statement and how these adjustments are linked to accrual accounting.

Please type all the answer,thanks!!!