Cash Flow Flashcards
How do you deal with inventory trade receivables and trade payable in a cash flow statement?
Increase in inventory and trade receivable lead to a deduction
Increase in payable leads to an addition
What is a finance cost?
It is an interest expense, you remove it from the operating activities
How do you deal with depreciation and loss on disposal?
Depreciation and loss gets added
Create a t table for interest payable and tax
Dr cash paid (x) and payable carried forward
Cr payable brought forward and SOPL expense
You want to calculate the cash paid (payable b/f + SOPL expense) - payable c/f
Create a t table for PPE carrying amount
Dr carrying amount b/f and additions
Cr disposals at carrying amount and depreciation charge for the year and carrying amount c/f
What are the steps to create a t table for PPE?
- Debit the balance brought forward.
- Credit balance carried forward.
- Credit accum depreciation.
- Credit disposal (workout carrying value. Cost- a dep)
- Total credit and calculate balancing figure (add to debit)
How do you calculate profit on disposal?
Proceeds - carrying value
What are the steps to create a t table for interest receivable?
- Debit interest receivable b/f
- Credit interest receivable c/f
- Debit any additions from interest
- Use the totals to work out interest received (balancing figure)
How do you calculate purchase of new investment?
Compare prior year to current year
How do you calculate the proceeds of issue of shares in SOCF
Proceeds of issue of shares is the movement on the share capital and share premium balances across the year.
How do you calculate the proceeds of repayment of loans in SOCF?
This should be the movement on the loans balance between the beginning and end of year
How do you calculate dividends in SOCF?
(Retained earnings bf + profit) - retained earnings cf
