Page 152 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 7: Fund Flow Statement

Profit on Sale of Long-term Investments xxxx Notes
Profit on Redemption Debentures/Preference Shares xxxx
(G) Non-operating Incomes:
Dividend Received xxxx
Interest Received xxxx

Rent Received xxxx
Fund From Operations/Fund Lost in Operations xxxxx
The second method of determining the fund from operations under the first classification is the
Accounting Statement Format.
Adjusted Profit & Loss A/c
Dr Cr

To Depreciation xxxx By Opening Balance Profit xxxx
To Goodwill Written off xxxx By Profit on Sale of Fixed Assets xxxx
To Patent Written off xxxx By Profit on Sale of Investments xxxx
To Loss on Sale of Fixed Asset xxxx By Profit on Redemption of Liability xxxx
To Loss on Sale of Investment xxxx By Transfer from General Reserve xxxx
To Loss on Redemption of Liability xxxx By Balancing Figure fund from Operations xxxx
(FFO)
To Preliminary Expenses off xxxx
To Proposed Dividend xxxx
To Transfer to General Reserve xxxx
To Current Year Provision for Taxation xxxx
To Current Year Provision for xxxx
Depreciation
To Balancing Figure xxxx
(Fund Lost in Operations)

7.5.2 Sales Method

Under this method, the following is the statement format is used to arrive fund flow from
operations.
Sales xxxxx
Stock at the end xxxxx
Less:
Application:
Stock at Opening xxxx
Net Purchases(Purchase-Returns) xxxx
Wages xxxx
Salaries xxxx
Telephone expenses xxxx
Electricity charges xxxx

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