Module 24: Statement of Cash Flows Flashcards
Overdraft
Always assume part of cash
The direct method - cash receipts from customers
Opening trade receivables + revenue - closing trade receivables
Opening trade receivables - bad debts written off
Deduct
Opening trade receivables - allowance for receivables
Increase > deduct
Decrease > add
The direct method: cash paid to suppliers and employees
Opening payables + purchases and expenses - closing payables
Opening and closing payables exclude (2)
Current tax payable
Accrued finance costs
Opening and closing payables - include (3)
- trade payables
- accruals less prepayments
- provisions related to operating profit
Purchases
Cost of sales + closing inventories - opening inventories
Expenses (2)
- Distribution costs
- Administrative expenses
Expenses: Depreciation
Add
Expenses gain on disposal
Add
Expenses loss on disposal
Deduct
Expenses - release of deferred income
Add
Expenses bad debt
Deduct
Expenses - increase in allowance for receivables
Deduct
Expenses decrease in allowance for receivables
Add
Taxes paid
Opening tax balance + taxation for the year - closing tax balance
Opening/ closing tax balance includes (2)
- Current tax payable
- deferred tax liability/ asset
Interest paid and received
Opening accrued finance costs/ income + finance costs/ income - closing accrued finance costs/ income
Dividends paid
Opening retained earnings + profit for the year + other equity transactions - closing retained earnings
Difference = dividends paid
Purchases of PPE
Opening carrying amount \+ revaluation increase - depreciation charge for the year - carrying amount of disposal \+ right of use asset under new lease
Compare to closing carrying amount
