QUESTION 4Pearl Bhd is a manufacturing company operating in Puchong, Selangor. Since 2017, thecompany has been producing steel products. At the end of the financial year 2021, thefinancial statement for Pearl Bhd is as follows:Pearl BhdStatement of Financial Position as at 30 June2021RM2020RMNon-Current AssetsProperty, Plant & Equipment300,400Patents and trademarks23,800Total Non-Current Assets324,200Current AssetsInventories47,700Trade Receivables, net7,800Cash and Cash Equivalents38,800Prepaid expenses1,500Total Current Assets95,800Total Assets420,000EquityOrdinary Share200,000Preferred share34,000Retained Earnings59,860Total Equity293,860Non-Current LiabilitiesLong term loan75,000Total Non-Current Liabilities75,000Current LiabilitiesTrade payables39,640Income Tax Payables4,800Accrued expenses6,700Total Current Liabilities51,140Total Equity and Liabilities420,000347,20020,240367,44059,2809,68034,6002,000105,560473,000241,78038,95070,050350,78080,00080,00032,9206,3003,00042,220473,000Pearl BhdStatement of Profit or Loss and Other Comprehensive incomefor the year ended 30 June 2021Sales revenueRM796,300385,760410,540Less: Cost of SalesGross ProfitLess: Administrative Expenses75,600Distribution Costs88,240Other expenses156,700Income before Tax90,000Less: Income Tax Expense26,89063,110Net incomeAdditional information:1. Pearl Bhd sold a property with a carrying value of RM98,000 for RM140,000 during thefinancial year ended 30 June 2021.2.Included in other expenses is depreciation for the year 2021 amounting to RM34,000.Company has declared and paid dividend for the year.3.Required:a)Prepare a statement of cash flow using indirect method for Pearl Bhd. for the year ended30 June 2021b)Explain TWO (2) differences between indirect method and direct method in preparingstatement of cash flows.c)Briefly explain THREE (3) purposes of preparing statement of cash flows.

1. Statement of Cash Flow - This is the statement that shows the movement of cash within the…

QUESTION 4 Pearl Bhd is a manufacturing company operating in Puchong, Selangor. Since 2017, the company has been producing steel products. At the end of the financial year 2021, the financial statement for Pearl Bhd is as follows: Pearl Bhd Statement of Financial Position as at 30 June 2021 2020 RM RM Non-Current Assets Property, Plant & Equipment 347,200 Patents and trademarks 20,240 Total Non-Current Assets. 367,440 Current Assets Inventories 59,280 Trade Receivables, net 9,680 Cash and Cash Equivalents 34,600 Prepaid expenses 2,000 105,560 Total Current Assets Total Assets 473,000 Equity Ordinary Share 241.780 Preferred share 38,950 Retained Earnings 70,050 Total Equity 350,780 Non-Current Liabilities Long term loan 80,000 Total Non-Current Liabilities 80,000 Current Liabilities Trade payables 32,920 Income Tax Payables 6,300 Accrued expenses 3,000 Total Current Liabilities 42,220 Total Equity and Liabilities 473.000 300,400 23,800 324,200 47,700 7,800 38,800 1,500 95,800 420,000 200,000 34,000 59,860 293,860 75,000 75,000 39,640 4,800 6,700 51,140 420.000 Pearl Bhd Statement of Profit or Loss and Other Comprehensive income for the year ended 30 June 2021 Sales revenue RM 796,300 385,760 410,540 Less: Cost of Sales Gross Profit Less: Administrative Expenses 75,600 75,600 Distribution Costs 88,240 Other expenses 156,700 Income before Tax 90,000 Less: Income Tax Expense 26,890 Net income 63,110 Additional information: 1. Pearl Bhd sold a property with a carrying value of RM98,000 for RM140,000 during the financial year ended 30 June 2021. 2. Included in other expenses is depreciation for the year 2021 amounting to RM34,000. Company has declared and paid dividend for the year. 3. Required: a) Prepare a statement of cash flow using indirect method for Pearl Bhd. for the year ended 30 June 2021 b) Explain TWO (2) differences between indirect method and direct method in preparing statement of cash flows. c) Briefly explain THREE (3) purposes of preparing statement of cash flows.