Cash Flow Statement

FR – L2 – Q74 – Statement of Cash Flows

List four advantages of cash flow accounting as per IAS 7.

Question

IAS 7 Statement of Cash Flows states that additional information may be relevant to users in understanding the financial position and liquidity of an entity.

(a) State FOUR advantages of cash flow accounting.

(b) Highlight THREE of the disclosures which are required by the Standard (with comments) by the management of the entity when preparing the statement of cash flow

(c) Nexis Limited’s statement of profit or loss for the year ended 31 December 20X4 and statement of financial position as at 31 December 20X3 and 20X4 are as follows:

NEXIS LIMITED
Statement of profit or loss for the year ended 31 December 20X4

	GH¢’m
Revenue	360
Raw Materials consumed	35
Staff costs	47
Depreciation	59
Loss on disposal of non-current assets	9
	150
Operating profit before interest and tax	210
Interest payable	14
Profit before tax	196
Taxation	62
	134

NEXIS LIMITED
Statement of Financial Position as at 31 December 20X4

	20X4 GH¢’m	20X3 GH¢’m
Non-Current Assets
Cost	798
Depreciation	159
	639
Current Assets
Inventory	12	10
Trade receivable	38	29
Bank	24	28
	74	67
Total Assets	713
Equity and liabilities
Share capital	198	182
Retained earnings	358	291
	556	473
Non-current liabilities
Long-term loans	100	250
Current liabilities
Trade payables	6	3
Taxation	51	43
	57	46
Total equity and liabilities	713

Dividend paid was GH¢33 million.
During the year, the company paid GH¢45 million for a new piece of machinery.

Required
Prepare a Statement of Cash Flows for Nexis Limited for the year ended 31 December 20X4, in accordance with the requirements of IAS 7, using the indirect method.

Answer

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Tags: Cash Flow Statement, Financial Reporting, Financing Activities, IAS 7, Indirect Method, Investing Activities, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)

FR – L2 – Q73 – Statement of Cash Flows

Prepare a cash flow statement for Fellon Plc for 20X4 using IAS 7, based on provided financial data and additional information.

Question

Fellon Plc has prepared the following rough draft accounts for the year ended 31 December 20X4.

Statement of profit or loss

	GH₵’000
Revenue	11,563
Cost of sales	(5,502)
Gross profit	6,061
Distribution costs	(402)
Administration expenses	(882)
Interest payable	(152)
Operating profit before tax	4,625
Taxation (35%) including deferred tax	(1,531)
Profit after tax	3,094
Dividends	(700)
Retained profit	2,394

Statements of financial position

	31 December 20X4 GH₵’000	31 December 20X3 GH₵’000
Non-current assets
Property, plant and equipment	10,380	9,108
Current assets
Inventories	2,208	1,314
Trade receivables	1,986	1,392
Investments	1,992	2,190
Cash at bank and in hand	–	576
	6,186	5,472
Total assets	16,566	14,580
Equity and liabilities
Equity
Share capital	4,392	3,600
Retained earnings	6,714	4,320
	11,106	7,920
Non-current liabilities
Long-term loans	1,240	1,800
Deferred repairs provision	702	516
	1,942	2,316
Current liabilities
Trade payables	2,038	1,714
Bank overdraft	222	–
Taxation	1,258	2,630
	3,518	4,344
Total equity and liabilities	16,566	14,580

The following data is relevant.
(1) The 10% long-term loan was redeemed at par.
(2) Plant and equipment with a written down value of GH₵276,000 was sold for GH₵168,000. New plant was purchased for GH₵2,500,000.
(3) Buildings costing GH₵1,300,000 were acquired during the year.
(4) The investments are highly liquid securities held for the short term.

Required
Prepare the cash flow statement and supporting notes in accordance with IAS 7 for Fellon Plc for 20X4.

Answer

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Tags: Cash Flow Statement, Depreciation, Dividends, Financial Position, Financing Activities, IAS 7, Investing Activities, Loan Redemption, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)

FR – L2 – Q72 – Statement of Cash Flows

Prepare a cash flow statement for Model Ltd for 20X4 per IAS 7, using trial balance and additional information.

Question

MODEL LTD
The following trial balance relates to Model Ltd as at 31 December 20X4.

	GH¢’000	GH¢’000
Freehold property at cost	5,700
Plant and machinery at cost	36,000
Fixtures and fittings at cost	12,000
Inventories	14,000
Trade receivables	15,200
Long-term investments	4,600
Cash at bank	11,400
Accumulated depreciation: Plant and machinery		12,000
Accumulated depreciation: Fixtures and fittings		7,000
10% Long-term loan		1,800
Ordinary share capital		20,000
Share premium		2,500
Retained earnings		14,000
Revenue		92,000
Cost of sales	60,000
Operating expenses	7,200
Corporation tax		21,500
Trade payables		14,440
Long-term investment income		450
Government stock	3,000
	169,250	169,250

The following information is relevant.
(a) There had been no disposal of freehold property in the year.
(b) A machine tool which had cost GH¢8,000,000 (in respect of which GH¢6,000,000 depreciation had been provided) was sold for GH¢3,000,000, and fixtures which had cost GH¢5,000,000 (in respect of which depreciation of GH¢2,000,000 had been provided) were sold for GH¢1,000,000. Profits and losses on those transactions had been dealt with through the statement of profit or loss.
(c) The statement of profit or loss charge in respect of tax was GH¢22,000,000.
(d) The premium paid on redemption of the long-term loan was GH¢2,000,000, which has been written off to the statement of profit or loss.
(e) The proposed dividend for 20X3 had been paid during the year.
(f) Interest received during the year was GH¢450,000. Interest charged in the statement of profit or loss for the year was GH¢6,400,000. Accrued interest of GH¢440,000 is included in payables at 31 December 20X3 (nil at 31 December 20X4).
(g) The government stock is a long-term investment.

Required
Prepare a cash flow statement for the year ended 31 December 20X4, together with notes as required by IAS 7.

Answer

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Tags: Cash Flow Statement, Financing Activities, IAS 7, Indirect Method, Investing Activities, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)

PSAF – L2 – Q11.4 – Preparation and presentation of financial statements for central government

Prepare the cash flow statement for Zamunda Central Government for 2024 with reconciliation notes.

Question

The Central Government of Zamunda: Cash flows statement for the year ended 31st December 2024

Prepare the cash flow statement for the Central Government of Zamunda for the year ended 31st December 2024, based on the following data:

Cash flows from operating activities	GHC million
Corporate income tax	38,000
Custom and excise duties	43,000
Value added taxes	45,000
Multilateral grants	16,000
Income tax (PAYE)	15,000
Fee and charges for services	10,000
Dividend and other investment income	7,000
Bilateral grants	12,000
Fines, penalties and forfeitures	9,000
Established post salaries	(22,000)
Non-established post salaries	(20,000)
13% SSF contribution for staff	(7,000)
Staff allowances	(8,000)
Administrative cost	(15,000)
Seminar and workshops	(12,000)
Training and capacity building	(6,000)
Foreign travelling cost	(5,000)
Repair and maintenance	(8,000)
Domestic debt interest paid	(12,000)
External debt interest paid	(12,000)
Payments for subsidies on utilities	(12,000)
Payment for subsidies on fuel	(12,000)
Community empowerment program	(12,000)
Support for social protection of aged widows	(12,000)
Statutory transfers	(12,000)
Other expenses	(12,000)

Cash flows from investing activities	GHC million
Recoveries of loans and advances	8,000
Payment for property, plant and equipment during year	(18,000)
Payments for infrastructure during year	(20,000)
Loans and advances granted during the year	(13,000)

Cash flows from financing activities	GHC million
External borrowing during the year	30,000
Domestic borrowing during the year	20,000
Repayment of external borrowing during the year	(10,000)

Additional information for notes:

Surplus of revenue over expenses for the year ending 2024: GHC 23,200 million
Depreciation charged for the year: GHC 3,500 million
Increase in inventories: GHC (1,500) million
Taxes recoverable: GHC (16,200) million
Accrued expenses: GHC 11,000 million

Prepaid rent: GHC (5,000) million

W1 Taxes recoverable	GHC million
Corporate income taxes	3,000
Customs & excise duties	5,000
VAT	6,000
Personal Income Tax	4,000
Total taxes receivable	18,000
Less amount estimated as irrecoverable	1,800
Taxes recoverable	16,200

W2 Accrued expenses	GHC million
Domestic debt interest	3,000
External debt interest	4,000
Accrued salaries	4,000
Total accrued expenses	11,000

W3 Prepaid Rent	GHC million
Prepaid Rent	5,000

Include a reconciliation note for surplus/deficit to cash flows from operating activities.

Answer

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Tags: Cash Flow Statement, Central Government, Financial Statements, Financing Activities, Investing Activities, Operating Activities, Public Sector, Surplus Reconciliation
Level: Level 2

Topic: Preparation and Presentation of Financial Statements for Central Government

PSA – L2 – Q11.2 – Preparation and Presentation of Financial Statements for Central Government

Prepare 2024 cash flow statement for Central Government of Salima with notes.

Question

Prepare the Central Government of Salima: Cash flows statement for the year ended 31st December 2024.

Answer

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Topic: Preparation and Presentation of Financial Statements for Central Government

Tag (SQ): Cash Flow Statement

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FR – L2 – Q74 – Statement of Cash Flows

List four advantages of cash flow accounting as per IAS 7.

FR – L2 – Q73 – Statement of Cash Flows

Prepare a cash flow statement for Fellon Plc for 20X4 using IAS 7, based on provided financial data and additional information.

FR – L2 – Q72 – Statement of Cash Flows

Prepare a cash flow statement for Model Ltd for 20X4 per IAS 7, using trial balance and additional information.

PSAF – L2 – Q11.4 – Preparation and presentation of financial statements for central government

Prepare the cash flow statement for Zamunda Central Government for 2024 with reconciliation notes.

PSA – L2 – Q11.2 – Preparation and Presentation of Financial Statements for Central Government

Prepare 2024 cash flow statement for Central Government of Salima with notes.

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FR – L2 – Q74 – Statement of Cash Flows

List four advantages of cash flow accounting as per IAS 7.

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FR – L2 – Q73 – Statement of Cash Flows

Prepare a cash flow statement for Fellon Plc for 20X4 using IAS 7, based on provided financial data and additional information.

You're reporting an error for "FR – L2 – Q73 – Statement of Cash Flows"

FR – L2 – Q72 – Statement of Cash Flows

Prepare a cash flow statement for Model Ltd for 20X4 per IAS 7, using trial balance and additional information.

You're reporting an error for "FR – L2 – Q72 – Statement of Cash Flows"

PSAF – L2 – Q11.4 – Preparation and presentation of financial statements for central government

Prepare the cash flow statement for Zamunda Central Government for 2024 with reconciliation notes.

You're reporting an error for "PSAF – L2 – Q11.4 – Preparation and presentation of financial statements for central government"

PSA – L2 – Q11.2 – Preparation and Presentation of Financial Statements for Central Government

Prepare 2024 cash flow statement for Central Government of Salima with notes.

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