Malabar Bhd is a public company in Segamat, Johor. The Statements of Financial Position as at 30 September 2019 and 2020 are as follows: Malabar Bhd...
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Malabar Bhd is a public company in Segamat, Johor. The Statements

of Financial Position  as at 30 September 2019 and 2020 are as follows: 


Malabar Bhd 
Statement of Financial Position as at 30 September 2019 and 2020 
Assets 2019  2020 
(RM) (RM)
Land  750000 750000
Machinery  500000 700000
Building  - 500000
Short term investment  40000 30000
Long term investment  - 250000
Inventories  300000 240000
Trade receivables  350000 420000
Bank  2350000 3190000




Equity and Liabilities
Ordinary shares of RM1.00 each  700000 700000
8% Debentures  - 500000
10% Preference shares of RM1.00 each  500000 700000
Share premium  - 40000
Retained earnings  300000 220000
8% Bank loan  - 250000
Trade payables  545000 430000
Accrued administration expense  15000 20000
Tax payable  40000 30000
Accumulated depreciation - Machinery  250000 300000
2350000 3190000
Additional information: 


1. There were cash purchases of machinery and building. 
2. Tax expense for the year was RM100,000. 
3. Dividends paid for the year ended 30 September 2020 amounted to RM50,000 for  10% preference shares and RM110,000 for ordinary shares. 
4. Malabar Bhd issued preference shares at premium. 
5. Short term investment qualifies as cash and cash equivalent. 
Required: 
a. Make Statement of Cash Flow for Malabar Bhd for the year ended 30 September  2020 using the direct method. 
b. The Statement of Cash Flow is one of the statutory financial statements presented by  companies. Discuss the usefulness of cash flow accounting to Malabar Bhd.

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