Statement of Cash Flow (Indirect Method)

Particulars

Net Income
Adjustment to determine cash flows from operating activities:
(+) Decrease in account receivable
(-) Increase in account receivable
(+) Decrease in merchandise inventory
(-) Increase in merchandise inventory
(+) Decrease in prepaid expense
(-) Increase in prepaid expense
(+) Increase in account payable
(-) Decrease in account payable
(+) Increase in income tax payable
(-) Decrease in income tax payable
(+) Increase in accrued expenses
(-) Decrease in accrued expenses
(+) Decrease in current asset
(-) Increase in current asset
(+) Increase in current liabilities
(-) Decrease in current liabilities
(+) Depreciation expense
(+) Loss on sale of fixed asset
(-) Profit on sale of fixed asset
(+) Loss on retirement of bond
(-) Profit on retirement of bond
Net cash flows from operating activities
Cash flows from investing activities:
(+) Sale of fixed asset
(-) Purchase of fixed asset
(+) Sale of debt and security of other company
(-) Purchase of debt and security of other company
(+) Decrease in investment (long term securities)
(-) Increase in investment (long term securities)
(+) Decrease in fixed asset
(-) Increase in fixed asset
(+) Decrease in long term asset
(-) Increase in long term asset
Net cash flows from investing activities
Cash flows from financing activities:
(+) Sale/issuance/increase of common stock, preferred stock, treasury stock, bond, debenture, note
(-) Purchase/decrease of common stock, preferred stock, treasury stock, bond, debenture, note
(+) Sale of debt and share of own company
(-) Purchase of debt and share of own company
(+) Increase in bonds payable
(-) Decrease in bonds payable
(+) Increase in

(-) Payment of dividend

(-) Redemption of bond
Net cash flows from financing activities
Net increase or decrease in cash flows
(+) Cash at beginning of the period
Cash at end of the period
Non cash financing and investing activities

Depreciation Expense Calculation:

1. Actual value or original value - book value + current year depreciation - last year depreciation
2. Actual value or original value - sold price (- loss or + profit on sale) + current year depreciation - last year depreciation

Fixed Asset Sale/ Original or Actual Cost of Fixed Asset

(-) Accumulated depreciation of fixed asset
Book value of fixed asset
(+) Profit on sale of fixed asset
(-) Loss on sale of fixed asset
Cash received from sale of fixed asset

Fixed asset sale

(+) Increase in fixed asset
(-) Decrease in fixed asset
Cash paid for new fixed asset

For Example: Decrease in fixed asset 20000, loss on sale 10000, so sales price 10000
Amount $ Amount $2

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ast year depreciation

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 BADAL OLD HOME
Income Statement
For the year ended December 31, 2000
Particulars Amount $ Amount $2
Sales ***
(-) sales discount/return (***)
Net Sales ***
(-) Cost of Goods Sold (***)
Gross Margin ***
(-) Administrative overhead/expense:
Office rent, supply, clearing expense ***
Salaries of officer & office staff ***
Directors fees ***
Office electricity & light ***
Office equipment depreciation, repair, reissue ***
Office insurance & maintenance ***
Bank charge, accountancy expense *** (****)
(-) Sales overhead/expense:
Sales center rent, insurance ***
Salary of salesman ***
Advertising, exhibition expense ***
Carriage outward ***
Delivery van & sales equipment depreciation, repair, reissue ***
Mass communication expense ***
Bad debt *** (***)
Net Income ****
 BADAL OLD HOME
Statement of Cost/ Cost Sheet/ Cost of Goods Sold Statement
For the month/year ended December 31
Particulars Detail Cost
Direct Materials:
Raw materials inventory(Beginning) ***
(+) Purchase of raw materials ***
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(-) Purchase return (***)
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(+) Carriage inward ***
Raw materials available for use ***
(-)Raw materials inventory(Ending) (***)
Raw materials used in production
(+)Direct labor/manufacturing labor, direct expense, packing expense
Prime Cost
Manufacturing/ Factory Overhead:
Factory rent ***
Factory utilities ***
Factory power & lighting ***
Factory insurance ***
Salary of factory manager & staff ***
Factory maintenance expense ***
Drawing office salary & design expense ***
Factory fuel, gas, coal ***
Factory motive power ***
Factory indirect labor ***
Factory indirect expense ***
Factory expense ***
Factory equipment depreciation ***
Factory equipment repair, reissue ***
Research & development ***
Product quality improvement ***
Annual clearing expense ***
Leisure time labor & expense ***
Total Overhead Cost
Total Manufacturing/Factory/Works Cost
(+) Work in process inventory (Opening)

(-) Work in process inventory (Closing)

Cost of Goods Manufactured
(+) Finished goods inventory (Opening)
Goods Available for Sale
(-) Finished goods inventory (Closing)
Cost of Goods Sold
Total Cost

*Direct labor+Manufacturing/Factory Overhead cost= Conversion Cost

*Per Unit Cost=COGM/Number of Unit
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 BADAL OLD HOME
Bank Reconciliation Statement
December 31,2000
Particulars Amount $ Amount $2
Cash balance as per bank statement (end of period) ***
(+) Deposit in transit ***
Undeposited receipts (cash on hand) ***
Bank errors that understate the bank statement balance *** ***
***
(-) Outstanding checks ***
Bank errors that overstate the bank statement balance *** (***)
Correct Cash Balance ***

Cash balance as per depositor's book ***

(+) collections by bank not yet recorded in the book ***
Interest income, investment, dividend, B/R ***
EFT receipts ***
Amount wrongly credited by bank ***
Book errors that understate the book balance *** ***
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(-) Bank charges not yet recorded in the books ***
Service charge ***
NSF Checks ***
EFT payments ***
Book errors that overstate the book balance *** (***)
Correct Cash Balance ***
Sales Budget
Perticulars Amount
Budgeted sales in unit **
Selling price per unit **
Total sales ***

Direct Material Budget

Perticulars Amount

Expected Cash Collection

Perticulars Amount
A/R, beginning.Cash Sales **
other month collections, sales **
Total cash collections ***
Expected Cash Payments
Perticulars Amount

Total Cash Disbursements

Cash Budget
Perticulars Amount
Cash balance, beginning **
Add: cash collection from customer **
Total Cash Available ***
Less: Disbursements **
Excess(deficiency) of cash ***
Financing:
Borrowing **
Cash Balance on Month ***

Budgeted Income Statement

For the Three Month Ended June 30, 19X1

Sales (100,000 units @ $10) **

Cost of goods sold (100,000 @ $4.99) **
Gross margin ***
Selling and administrative expenses **
Operating income ***
Interest expense **
Net income ***

Budgeted Balance Sheet

June 30

Current assets
Cash **
Accounts receivable **
Raw materials inventory **
Finished goods inventory **
Total current assets ***
Property and equipment
Land **
Equipment **
Total property and equipment ***
Total assets ***

Accounts payable **
Common stock **
Retained earnings **
Total liabilities and equities ***

Financing and Repayment

April May
Excess (deficiency)   of Cash available
  over disbursements $ (20,000) $ 30,000
Financing:
Borrowing 50,000 -
Repayments - -
Interest - -
Total financing 50,000 -
Ending cash balance $ 30,000 $ 30,000

Cash Budget
April May
Beginning cash balance $ 40,000 $ 30,000
Add cash collections 170,000 400,000
Total cash available 210,000 430,000
Less disbursements
Materials 40,000 72,300
Direct labor 15,000 23,000
Mfg. overhead 56,000 76,000
Selling and admin. 70,000 85,000
Equipment purchase - 143,700
Dividends 49,000 -
Total disbursements 230,000 400,000
Excess (deficiency) of   cash available
over   disbursements $ (20,000) $ 30,000

Selling and Administrative Expense Budget

April May
Budgeted sales 20,000 50,000
Variable selling   and admin. rate $ 0.50 $ 0.50
Variable expense $ 10,000 $ 25,000
Fixed selling and   admin. expense 70,000 70,000
Total expense 80,000 95,000
Less noncash   expenses 10,000 10,000
Cash disburse-  ments for   selling &
admin. $ 70,000 $ 85,000

Manufacturing Overhead Budget

April May
Production in units 26,000 46,000
Variable mfg. OH rate $ 1 $ 1
Variable mfg. OH costs $ 26,000 $ 46,000
Fixed mfg. OH costs 50,000 50,000
Total mfg. OH costs 76,000 96,000
Less noncash costs 20,000 20,000
Cash disbursements   for manufacturing
OH $ 56,000 $ 76,000

The Direct Labor Budget

April May
Production 26,000 46,000
Direct labor hours 0.05 0.05
Labor hours required 1,300 2,300
Guaranteed labor hours 1,500 1,500
Labor hours paid 1,500 2,300
Wage rate $ 10 $ 10
Total direct labor cost $ 15,000 $ 23,000
Production Budget
PerticularsAmount
 June Quarter

$ 95,000 $ 45,000

- 50,000
(50,000) (50,000)
(2,000) (2,000)
(52,000) (2,000)
$ 43,000 $ 43,000

June Quarter
 June Quarter
30,000 100,000
$ 0.50 $ 0.50
$ 15,000 $ 50,000
70,000 210,000
85,000 260,000
10,000 30,000

$ 75,000 ###

June Quarter
29,000 101,000
$ 1 $ 1
$ 29,000 ###
50,000 150,000
79,000 251,000
20,000 60,000

$ 59,000 ###

June Quarter
29,000 101,000
0.05 0.05
1,450 5,050
1,500
1,500 5,300
$ 10 $ 10
$ 15,000 $ 53,000
Sales Budget
Perticulars Amount
Budgeted sales in unit **
Selling price per unit **
Total sales ***

April May June

Budgeted   sales (units) 20,000 50,000 30,000
Selling price   per unit $ 10 $ 10 $ 10
Total sales $ 200,000 $ 500,000 $ 300,000

Expected Cash Collection

Perticulars Amount
A/R, beginning.Cash Sales **
other month collections, sales **
Total cash collections ***

Column1 April May June

Accounts rec. - 3/31 $ 30,000
April sales
70% x $200,000 140,000
25% x $200,000 $ 50,000
May sales
70% x $500,000 350,000
25% x $500,000 $ 125,000
June sales
70% x $300,000 210,000
Total cash collections $ 170,000 $ 400,000 $ 335,000

Production Budget
Perticulars Amount

Column1 April May June

Budgeted sales 20,000 50,000 30,000
Add desired ending   inventory 10,000 6,000 5,000
Total needed 30,000 56,000 35,000
Less beginning   inventory 4,000 10,000 6,000
Required production 26,000 46,000 29,000

Direct Material Budget

Perticulars Amount
Column1 April May June
Required production 26,000 46,000 29,000
Materials per unit 5 5 5
Production needs 130,000 230,000 145,000
Add desired   ending inventory 23,000 14,500 11,500
Total needed 153,000 244,500 156,500
Less beginning   inventory 13,000 23,000 14,500
Materials to be   purchased 140,000 221,500 142,000

Expected Cash Disbursements

Perticulars Amount

Total Cash Disbursements

April May June

Accounts pay. 3/31 $ 12,000
April purchases
50% x $56,000 28,000
50% x $56,000 $ 28,000
May purchases
50% x $88,600 44,300
50% x $88,600 $ 44,300
June purchases
50% x $56,800 28,400
Total cash disbursements $ 40,000 $ 72,300 $ 72,700

The Direct Labor Budget

April May June
Production 26,000 46,000 29,000
Direct labor hours 0.05 0.05 0.05
Labor hours required 1,300 2,300 1,450
Guaranteed labor hours 1,500 1,500 1,500
Labor hours paid 1,500 2,300 1,500
Wage rate $ 10 $ 10 $ 10
Total direct labor cost $ 15,000 $ 23,000 $ 15,000

Manufacturing Overhead Budget

April May June
Production in units 26,000 46,000 29,000
Variable mfg. OH rate $ 1 $ 1 $ 1
Variable mfg. OH costs $ 26,000 $ 46,000 $ 29,000
Fixed mfg. OH costs 50,000 50,000 50,000
Total mfg. OH costs 76,000 96,000 79,000
Less noncash costs 20,000 20,000 20,000
Cash disbursements   for
manufacturing OH $ 56,000 $ 76,000 $ 59,000

Ending Finished Goods Inventory Budget

Production costs per unit Quantity Cost Total
Direct materials 5.00 $ 0.40 $ 2.00
Direct labor 0.05 $ 10.00 0.50
Manufacturing overhead 0.05 $ 49.70 2.49
$ 4.99
Budgeted finished goods inventory
Ending inventory in units 5,000
Unit product cost $ 4.99
Ending finished goods inventory $ 24,950

Selling and Administrative Expense Budget

April May June
Budgeted sales 20,000 50,000 30,000
Variable selling   and admin. rate $ 0.50 $ 0.50 $ 0.50
Variable expense $ 10,000 $ 25,000 $ 15,000
Fixed selling and   admin. expense 70,000 70,000 70,000
Total expense 80,000 95,000 85,000
Less noncash   expenses 10,000 10,000 10,000
Cash disburse-  ments for   selling &
admin. $ 70,000 $ 85,000 $ 75,000

Cash Budget
Perticulars Amount
Cash balance, beginning **
Add: cash collection from customer **
Total Cash Available ***
Less: Disbursements **
Excess(deficiency) of cash ***
Financing:
Borrowing **
Cash Balance on Month ***

April May June

Beginning cash balance $ 40,000 $ 30,000 $ 30,000
Add cash collections 170,000 400,000 335,000
Total cash available 210,000 430,000 365,000
Less disbursements
Materials 40,000 72,300 72,700
Direct labor 15,000 23,000 15,000
Mfg. overhead 56,000 76,000 59,000
Selling and admin. 70,000 85,000 75,000
Equipment purchase - 143,700 48,300
Dividends 49,000 - -
Total disbursements 230,000 400,000 270,000
Excess (deficiency) of   cash available
over   disbursements $ (20,000) $ 30,000 $ 95,000

Financing and Repayment

April May June
Excess (deficiency)   of Cash available
  over disbursements $ (20,000) $ 30,000 $ 95,000
Financing:
Borrowing 50,000 - -
Repayments - - (50,000)
Interest - - (2,000)
Total financing 50,000 - (52,000)
Ending cash balance $ 30,000 $ 30,000 $ 43,000

The Budgeted Income Statement

Budgeted Income Statement
For the Three Months Ended June 30

Sales (100,000 units @ $10) $ 1,000,000

Cost of goods sold (100,000 @ $4.99) 499,000
Gross margin 501,000
Selling and administrative expenses 260,000
Operating income 241,000
Interest expense 2,000
Net income $ 239,000

Budgeted Balance Sheet

Budgeted Balance Sheet
June 30

Current assets
Cash $ 43,000
Accounts receivable 75,000
Raw materials inventory 4,600
Finished goods inventory 24,950
Total current assets 147,550
Property and equipment
 Land 50,000
Equipment 367,000
Total property and equipment 417,000
Total assets $ 564,550

Accounts payable $ 28,400

Common stock 200,000
Retained earnings 336,150
Total liabilities and equities $ 564,550
 Quarter
100,000
$ 10
$ 1,000,000

Quarter
$ 30,000

140,000
50,000

350,000
125,000

210,000
$ 905,000

Quarter
100,000
5,000
105,000
4,000
101,000
 Quarter
101,000
5
505,000
11,500
516,500
13,000
503,500

Quarter
$ 12,000

28,000
28,000

44,300
44,300

28,400
$ 185,000

Quarter
101,000
0.05
5,050

5,300
$ 10
$ 53,000

Quarter
101,000
$ 1
$ 101,000
150,000
251,000
60,000

$ 191,000

Quarter
100,000
$ 0.50
$ 50,000
210,000
260,000
30,000

$ 230,000

Quarter
$ 40,000
905,000
945,000
 185,000
53,000
191,000
230,000
192,000
49,000
900,000

$ 45,000

Quarter

$ 45,000

50,000
(50,000)
(2,000)
(2,000)
$ 43,000