Cash Flow Calculations

Question 1

What is the calculation for Dividends Paid?

Answer 1

(Opening RE + Profit) - Closing RE = Dividends Paid

Question 2

What are the steps for calculating Proceeds from issue of shares during the year?

Answer 2

1. Divide opening share capital by the bonus issue denominator to get the cost to share premium*.
   (Bonus issue of 1 for 20; 20 is the denominator).
2. Calculate proceeds from Share Capital:
   (Opening S.C + cost to share premium*) - Closing S.C.
3. Calculate proceeds from Share Premium:
   (Closing S.P + cost to share premium*) - Opening S.P
4. Add the proceeds from S.P and S.C together to get total proceeds from issue of shares.

Question 3

How do you calculate cost of disposals for both PPE and Intangibles.

Answer 3

Find the difference between opening and closing balances of cost.
(This is often provided separately from the SFP, below the additional information, if required).

Question 4

How do you calculate the profit on disposal?

Answer 4

Proceeds - Carrying Amount = Profit

Question 5

How do you calculate Proceeds from a disposal?

Answer 5

Carrying Amount + Profit = Proceeds

Question 6

How do you calculate the Carrying Amount of a disposal?

Answer 6

Proceeds - Profit = Carrying Amount

Question 7

How do you calculate the Carrying Amount of an Asset?

Answer 7

Asset Cost - Accumulated Depreciation = Carrying Amount

Question 8

How do you calculate Tax Paid?

Answer 8

(Opening Tax Payable + Income tax [SPL]) - Closing Tax Payable

Question 9

How do you calculate Interest Paid?

Answer 9

(Opening Interest Payable + Finance Costs [SPL]) - Closing Interest Payable

Question 10

How do you calculate the Accumulated Depreciation of an Asset?

Answer 10

Cost of the Asset - Carrying Amount = Accumulated Depreciation

Question 11

How do you calculate Movement in Inventories?

Answer 11

Closing Inventory - Opening Inventory

Question 12

How do you calculate the Purchase of PPE?

Answer 12

(Closing Balance + Disposal Cost) - Opening Balance

Question 13

How do you calculate the purchase of Intangible Assets?

Answer 13

(Opening value + Additions) - Closing Value

Question 14

How do you calculate the Proceeds from Sale of PPE?

Answer 14

Add the following to ‘PPE Proceeds’ T Account:

1. Determine original cost of PPE. [Dr]
2. Determine Accumulated Deprecation [Cr]
   (Original cost - Carrying amount)
3. Add any gain/loss on disposal [Cr]
4. Include any figures from additional information: Previous year [Dr], Current year [Cr]
5. Close off T Account. Difference between Dr’s and Cr’s is the Proceeds.

Question 15

How do you calculate the Proceeds from Issue of Shares, using profits?

Answer 15

1. Opening Share Capital + Opening Share Premium [Dr]
2. Closing Share Capital + Closing Share Premium [Cr]
3. Bonus figure (Taken out of retained earnings) [Cr]
   (Opening Share Capital / Offering Denominator)
4. Close T Account. Difference between Dr’s and Cr’s is the Proceeds.