Cashflow - Questions With Solutions
Cashflow - Questions With Solutions
Required
Prepare a statement of cash flows for Nardone Limited for the year ended 31
December 2015.
Required
Prepare a statement of cash flows.
Non-current liabilities
Loan 6,000 10,000
Current liabilities
Operating overdraft 11,000 –
Trade payables 8,000 11,000
Income tax payable 1,800 1,000
Accrued interest 700 200
——— 21,500 ——— 12,200
——— ———
Total equity and liabilities 46,700 29,000
——— ———
Statement of comprehensive income (extracts)
2015 2014
Rs.000 Rs.000
Operating profit 15,400 5,900
Financing cost (Interest) (1,000) (1,400)
——— ———
Profit before tax 14,400 4,500
Income tax expense (2,000) (1,500)
——— ———
Net profit for the year 12,400 3,000
——— ———
Equipment of carrying amount Rs.250,000 was sold at the beginning of 2015 for
Rs.350,000. This equipment had originally cost Rs.1,000,000.
In recent years, no dividends have been paid.
Required:
Prepare a statement of cash flows, under the indirect method, for the year ended 30
June 2015.
Required:
Prepare a statement of cash flows for the year ended 31 December 2015 in
accordance with IAS 7: Statement of cash flows
Profit for the year ended 31 December 2015 (Rs.25,200,000) is after accounting for
Rs.000
Depreciation
Premises 1,000
Equipment 3,000
Motor vehicles 3,000
Profit on disposal of equipment 430
Loss on disposal of motor vehicle 740
Interest expense 3,000
Required:
Prepare a statement of cash flows for the year ended 31 December 2015. Assume that
short-term investments are cash equivalents.
Current liabilities
Trade payables 40,000 60,000
Dividend payable 20,000 20,000
Bank overdraft – 4,000
———— ————
60,000 84,000
———— ————
237,000 343,000
———— ————
Required:
Prepare a statement of cash flows for the year ended 31 December 2014 using the
direct method.
5.8 ABIDA
Abida made a net profit of Rs. 256,800 for the year ended June 30, 2015 after charging
depreciation of Rs. 17,500 and loss on disposal of furniture of Rs. 6,800. The sale
proceeds of the furniture were Rs. 12,000.
During the year, the net book value of non-current assets decreased by Rs. 7,400;
receivables increased by Rs. 11,700; inventories decreased by Rs. 21,600 and
creditors increased by Rs. 8,900. A long-term loan of Rs. 75,000 was repaid during the
year and Abida withdrew Rs. 120,000 for his own use.
Required:
Prepare the statement of cash flows for the year ended June 30, 2015.
The comparative statements of financial position of Mr. Moosani show the following
information:
December 31
2015 2014
Rs. Rs.
Cash 5,200 41,400
Accounts receivable 31,700 21,500
Inventory 25,000 19,400
Investments - 16,900
Furniture 80,000 64,000
Equipment 86,000 43,000
Total 227,900 206,200
Allowance for doubtful accounts 6,500 9,700
Accumulated depreciation on equipment 24,000 18,000
Accumulated depreciation on furniture 8,000 15,000
Trade creditors 10,800 6,500
Accrued expenses 4,300 10,800
Bills payable 6,500 8,600
Long-term loans 31,800 53,800
Capital 136,000 83,800
Total 227,900 206,200
Additional data related to 2015 is as follows:
(i) Equipment that had cost Rs. 23,000 and was 40% depreciated at the time of
disposal was sold for Rs. 6,500.
(ii) Payments against long-term loans amounted to Rs. 22,000 of which Rs. 12,000
was paid by Mr. Moosani out of his personal account.
(iii) On January 1, 2015, the furniture was completely destroyed by a fire. Proceeds
received from the insurance company amounted to Rs. 60,000.
(iv) Investments were sold at Rs. 7,500 above their cost.
(v) Mr. Moosani withdraws Rs. 15,000 each month for his personal use.
Required:
Prepare a statement of cash flows for the year ended 31 December 2015.
Required:
Prepare a statement of cash flows for the year ended December 31, 2015.
Mr Junaid Janjua has provided you the following statements of financial position and
statement of comprehensive income.
Statements of financial position as on December 31, 2015
2015 2014
Rupees Rupees
Cash 145,000 32,000
Accounts receivable 280,000 104,000
Long-term investments 220,000 170,000
Inventory 424,000 200,000
Prepaid insurance 24,000 36,000
Office supplies 14,000 7,000
Land 1,810,000 2,500,000
Building 2,800,000 2,300,000
Accumulated depreciation (890,000) (720,000)
Equipment 1,200,000 1,150,000
Accumulated depreciation (380,000) (350,000)
Total assets 5,647,000 5,429,000
Notes:
(a) Part of the long term loan amounting to Rs. 100,000 was paid by Mr. Junaid from
his personal account.
(b) Long term investments costing Rs. 100,000 were sold during the year.
(c) Depreciation charged during the year on equipment amounted to Rs. 60,000.
Equipment having a book value of Rs. 75,000 was sold during the year.
Required:
Prepare a statement of cash flows for the year ended December 31, 2015.
Current Current
liabilities assets
Short term Investments
finance 2,545,000 1,616,000 4,911,000 -
Creditors 3,457,000 2,850,000 Inventory 12,178,000 14,950,000
6,002,000 4,466,000 Trade debts
– net of
provision
for bad
debts 6,732,000 4,887,000
Bank 442,000 225,000
24,263,000 20,062,000
39,435,000 32,408,000 39,435,000 32,408,000
The following information is also available:
Rupees
Profit during the year ended 31 August 201 161,000
Mr. Amin’s withdrawals during the year 120,000
Accumulated depreciation on non-current assets – 31 August 2014, 605,000
Accumulated depreciation on non-current assets – 31 August 2015 470,000
Provision for bad debts – 31 August 2014 385,000
Provision for bad debts – 31 August 2015 484,000
During the year non-current assets costing Rs. 1,500,000 with a carrying amount of
Rs. 867,000 were sold for Rs. 1,284,000.
Required:
Prepare a statement of cash flows for the year ended 31 August 2015. Show necessary
workings.
Workings:
W1: Cash from sales Rs.
Trade receivables at 1 January 2015 157,000
Sales in the year 905,000
1,062,000
Trade receivables at 31 December 2015 (173,000)
Cash from sales during the year 889,000
Cash paid for other expenses is the amount for expenses in the statement of
comprehensive income after deducting the depreciation charge: Rs.193,000 -
Rs.46,000 = Rs.147,000.
W5: Interest and tax payments Tax Interest
Rs. Rs.
Liability at 1 January 2015 45,000 11,200
Taxation charge/interest charge for the year 38,000 24,000
83,000 35,200
Liability at 31 December 2015 (41,000) (10,000)
Tax paid/interest paid during the year 42,000 25,200
Tutorial note
The accrued interest is removed from the figures because accrued interest is
relevant to the amount of interest paid in the year. This is a separate item in the
statement of cash flows.
W3: Taxation paid Rs.
Current taxation liability at 31 December 2014 470
Taxation charge in the year 602
1,072
Current taxation liability at 31 December 2015 (602)
Therefore taxation paid in the year 470
Quetta Track Limited: Statement of cash flows for the year ended 30 June 2015
Rs.000 Rs.000
Cash flows from operating activities
Net profit before tax 14,400
Adjustments for
Depreciation Rs.(3,000 + 1,000) 4,000
Profit on sale of non-current assets (W3) (100)
Interest expense 1,000
———
Operating profit before working capital adjustments 19,300
Increase in inventories (5,000)
Increase in trade receivables (7,250)
Decrease in trade payables (3,000)
———
Cash generated from operations 4,050
Interest paid (W5) (500)
Income taxes paid (W4) (1,200)
———
Net cash from operating activities 2,350
Workings
(1) Plant and machinery – Cost
v) Rs.000 Rs.000
Cash paid (E) 1,200 Bal b/d 1,000
Bal c/d 1,800 Tax charge to P&L 2,000
——– ——–
3,000 3,000
——– ——–
Marden Software Limited: Statement of cash flows for the year ended 31 December
2015
Rs.000 Rs.000
Cash flow from operating activities
Net profit before tax 1,381
Adjustments for
Depreciation charges (111 + 351) (W1, W2) 462
Profit on sale of machinery (W1) (19)
Loss on sale of fixtures (W2) 5
———
Operating profit before working capital adjustments 1,829
Increase in inventories (660)
Increase in trade receivables (773)
Increase in trade payables 4
———
Cash generated from operations 400
Income tax paid (W3) (255)
———
Net cash from operating activities 145
Rs.000 Rs.000
P & E – Carrying amt. 184 Cash – proceeds 203
Gain on disposal 19
—— ——
203 203
—— ——
Rs.000 Rs.000
Balance b/f 1,381 F & F – disposal 100
Bank – purchase (Bal. figure) 366 Depreciation 351
Balance c/f 1,296
——– ——–
1,747 1,747
——– ——–
Rs.000 Rs.000
F & F – Carrying amt. 100 Cash – proceeds 95
Loss on disposal 5
—— ——
100 100
—— ——
Rs.000 Rs.000
Bank – tax paid (Eal fig) 255 Balance b/f 257
Balance c/f 312 P&L a/c 310
—— ——
567 567
—— ——
Rs.000 Rs.000
Bank – dividends paid (Eal fig) 300 Balance b/f 132
Balance c/f 154 2015 dividend 322
—— ——
454 454
—— ——
Tarbela Traders: Statement of cash flows for the year ended 31 December 2015
Rs.000 Rs.000
Cash flows from operating activities
Net profit 25,200
Adjustments for
Depreciation 7,000
Net loss on disposals 310
Interest expense 3,000
———
Operating profit before working capital changes 35,510
Decrease in trade receivables (11,960 – 14,410) 2,450
Decrease in inventories (19,770 – 27,500) 7,830
Increase in trade payables ((32,050 – 400) – 20,950) 10,700
———
Cash generated from operations 56,490
Interest paid (3,000 – 400) (2,600)
———
Net cash from operating activities 53,890
Workings
(1) Equipment (WDV)
(3) Disposals
The Sindh Robotics Company: Statement of cash flows for the year ended 31
December 2014
Rs.000 Rs.000
Cash flows from operating activities
Cash receipts from customers (W1) 190,000
Cash paid to suppliers and employees (W2) (155,000)
————
Cash generated from operations 35,000
Interest paid (13,000)
Dividends paid* (20,000)
————
Net cash from operating activities 2,000
Cash flows from investing activities
Purchase of property and plant (40,000 + 1,000) (41,000)
Purchase of investments (30,000)
————
Net cash used in investing activities (71,000)
Cash flows from financing activities
Proceeds from issued shares (10,000 + 2,000) 12,000
Proceeds from long-term borrowings 50,000
————
Net cash from financing activities 62,000
————
Net decrease in cash and cash equivalents (7,000)
Cash and cash equivalents at 1 January 2014 3,000
————
Cash and cash equivalents at 31 December 2014 (4,000)
———
* Could be shown as a financing cash flow.
Rs.000 Rs.000
Balance b/d 40,000 Cash receipts (Eal fig) 190,000
Sales 200,000 Balance c/d 50,000
_______ ________
240,000 240,000
———— ————
(2) Payments
Payables and wage control
Rs.000 Rs.000
Cash paid (Eal fig) 155,000 Balance b/d 40,000
Depreciation * 2,000 Purchases (W3) 130,000
Balance c/d 60,000 Expenses 47,000
________
________ 217,000
217,000 ————
————
Rs.000 Rs.000
Opening inventory 55,000 Cost of sales 120,000
Purchases and wages 130,000 Closing inventory 65,000
________ ________
185,000 185,000
———— ————
* Alternatively, depreciation could be adjusted against cost of sales.
5.8 ABIDA
Cash flow for year ended June 30, 2015
Profit for the year 256,800
Depreciation 17,500
Loss on sale of furniture 6,800
Increase/decrease in working capital
Decrease in inventories 21,600
Increase in payables 8,900
Increase in receivables (11,700)
18,800
299,900
Add: Proceeds from sale of non-current
assets 12,000
311,900
Less: Purchase of non-current assets (W) 28,900
Payment of long term loan 75,000
Drawings 120,000
223,900
Net increase in bank balance 88,000
W Non-current assets
Decrease in assets 7,400 Depreciation 17,500
Purchase of assets –
balancing figure 28,900 Sale of furniture 12,000
Loss on above sale 6,800
36,300 36,300
5.9 MR MOSSANI
Statement of cash flows for the year ended December 31, 2015
Rs.000 Rs.000
Cash flows from operating activities
Net profit before tax 1,400,000
Adjustments for
Depreciation on non-current assets
(2,950,000 – 2,450,000)+200,000+(960,000 –
160,000) 1,500,000
Profit on sale of investment (70,000)
Profit on sale of non-current assets (90,000)
Interest expense (180 + 200 – 150) 230,000
Amin Industries: Statement of cash flows for the year ended 31 August 2015
Rs. Rs.
Cash flows from operating activities
Profit for the year 3,161,000
Adjustments for:
Depreciation charge 2,498,000
Profit on sale of non-current assets (1,284,000 –
867,000) (417,000)
Provision for doubtful debts (484,000 – 385,000) 99,000
Operating profit before working capital adjustments 5,341,000
Accumulated depreciation
On assets sold (1,500-867) 633,000 Opening 5,605,000
Closing balance 7,470,000 Charge for the year 2,498,000
8,103,000 8,103,000
Trade debts
Opening (4,887+385) 5,272,000
Increase in balance 1,944,000 Closing (6,732+484) 7,216,000
7,216,000 7,216,000