Page 48 - DCOM302_MANAGEMENT_ACCOUNTING

Unit 3: Analysis of Financial Statements

The following additional information was taken from the records of Oak and Tile Flooring Notes
Co:
(a) Equipment and land were acquired for cash.
(b) There were no disposals of equipment during the year.
(c) The investments were sold for $45,000 cash.
(d) The common stock was issued for cash.

(e) There was a $65,900 credit to retain earnings for net income.
(f) There was a $50,000 debit to Retained Earnings for cash dividends declared.
Prepare a statement of cash flow, using the indirect method of presenting cash flows from
operating activates.
12. Where is a contract with a customer reported on the balance sheet and why?

Answers: Self Assessment

1. horizontal 2. Ratio analysis
3. vertical analysis 4. financial ratios
5. ratios 6. vertical
7. True 8. True

9. (iv) 10. (iv)
11. (iv) 12. True
13. True 14. False
15. percentage 16. financial ratios

3.9 Further Readings

Books Khan and Jain, Management Accounting.
M. Pandey, Financial Management, Vikas Publishing, New Delhi.
Nitin Balwani, Accounting & Finance for Managers, Excel Books, New Delhi.
Prasanna Chandra, Financial Management — Theory and Practice, Tata McGraw
Hill, New Delhi (1994).
R. L. Gupta and Radhaswamy, Advanced Accountancy.
S. Bhat, Financial Management, Excel Books, New Delhi.
S.N. Maheswari, Management Accounting.
V.K. Goyal, Financial Accounting, Excel Books, New Delhi.

Online link www.managementstudyguide.com

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