Tag (SQ): Statement of Cash Flows

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  • 20 Marks

FA – L1 – Q102 – Statement of cash flows

Prepare a statement of cash flows for ZA Ltd for the year ended 31 May 20X9 using the indirect method per IAS 7.

The statements of financial position for the last two years for ZA Ltd are shown below. ZA Ltd implemented an expansion programme during the year ended 31st May 20X9.

20X8 20X9
GH¢ GH¢ GH¢ GH¢
Non-current assets (net) 380,000 530,000
Current assets
Inventory 80,000 108,000
Receivables 32,000 37,000
Bank 13,000 –
Cash 1,000 3,000
Total assets 506,000 678,000
Current liabilities
Payables 26,000 30,000
Corporation Tax 22,000 28,000
Overdraft – 5,000
Dividends – 21,000
Accruals – 4,000
Total liabilities 68,000 88,000
Capital and Reserves
Ordinary shares 350,000 490,000
General reserve 62,000 62,000
Revaluation reserve – 10,000
Retained earnings 26,000 28,000
Total capital and liabilities 506,000 678,000

Additional information:
(i) The total depreciation provision incorporated in the statements of financial position was GH¢48,000 at 31st May 20X8 and GH¢122,000 at 31st May 20X9.
(ii) During the year ended 31st May 20X9 a non-current asset costing GH¢22,000 with a carrying amount of GH¢6,000 was sold for GH¢1,000. No other disposals took place.
(iii) The revaluation surplus represents a revaluation of premises during the year ended 31st May 20X9.

Required:
(a) Prepare a statement of cash flows for ZA Ltd for the year ended 31st May 20X9 in accordance with IAS 7. (Use the indirect method).

(b) State the effects of the expansion policy on ZA Ltd.

Answer:

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  • 20 Marks

FA – L1 – Q101 – Statement of cash flows

Prepare a statement of cash flows for StarPharma Ltd for the year ended 30 June 20X9 using the indirect method.

The financial statements of StarPharma Ltd, a limited liability company that operates in the pharmaceuticals sector, at 30 June were as follows.

20X9 20X8
GH¢000 GH¢000 GH¢000 GH¢000
Assets
Non-current assets
Property cost 22,000 12,000
Depreciation (4,000) (1,000)
Plant and equipment 18,000 11,000
Cost 5,000 5,000
Depreciation (2,250) (2,000)
2,750 3,000
20,750 14,000
Current assets
Inventories 16,000 11,000
Trade receivables 9,950 2,700
Cash and cash equivalents – 1,300
25,950 15,000
Total assets 46,700 29,000
Equity and liabilities
Capital and reserves
Equity capital 3,000 3,000
Accumulated profits 16,200 3,800
19,200 6,800
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 profit or loss (extracts)
Operating profit
Financing cost (Interest)
Profit before tax
Income tax expense
Net profit for the year

Equipment of carrying amount GH¢250,000 was sold at the beginning of 20X9 for GH¢350,000. This equipment had originally cost GH¢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 20X9.

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  • 20 Marks

FA – L1 – Q100 – Statement of cash flows

Prepare a statement of cash flows for SpicyFlare Limited for the year ended 31 December 20X9 using provided financial data.

SpicyFlare Limited
SpicyFlare Limited summarised final accounts are as follows:

Statements of financial position

31 December 20X8 31 December 20X8
GH¢000 GH¢000 GH¢000
Non-current assets:
Plant and machinery at cost 2,700
Accumulated depreciation (748)
Carrying amount 1,952
Current assets:
Inventory 203
Receivables 147
Bank 51
401
Total assets 2,353
Ordinary share capital (GH¢1 shares) 740
Share premium account
Retained earnings 671
1,411
Non-current liabilities:
Loans
Current liabilities:
Bank overdraft
Trade payables and accruals 152
Current taxation 470
Total equity and liabilities 2,353

Statement of profit or loss for year ended 31 December 20X9
Profit before tax
Taxation
Profit after tax
Dividend payments during the year were GH¢230,000.

The following information is also available:
(1) The only new loan raised during the year was a five-year bank loan amounting to GH¢65,000.
(2) Interest charged during the year was GH¢156,000. Interest accrued was GH¢24,000 last year and GH¢54,000 this year.
(3) Depreciation charged during the year amounted to GH¢401,000. This does not include any profit or loss on disposal of non-current assets.
(4) During the year plant which originally cost GH¢69,000 was disposed of for GH¢41,000.
(5) During the year the company issued 200,000 new shares.

Required
Prepare a statement of cash flows.

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  • 20 Marks

FA – L1 – Q99 – Statement of Cash Flows

Prepare a statement of cash flows for Nordex Limited for 20X9 using financial statements and non-current asset details.

The following information has been extracted from the draft financial information of Nordex Limited.

Statement of Profit or Loss for the Year Ended 31 December 20X9

GH¢’000 GH¢’000
Sales revenue 1,350
Administration costs (346)
Distribution costs (246)
Operating profit 758
Interest expense (110)
Profit before tax 648
Taxation (208)
Profit after tax 440
Dividends paid (120)
Retained profit for the year 320

Statements of Financial Position

31 December 20X9 31 December 20X8
GH¢’000 GH¢’000 GH¢’000 GH¢’000
Non-current assets 1,145 957
Current assets
Inventory 157 142
Receivables 203 184
Cash and cash equivalents 41 10
401 401 336 336
Total assets 1,546 1,293
Equity and liabilities
Equity
Share capital 200 200
Revaluation surplus 170 100
Retained earnings 604 404
974 974 704 704
Non-current liabilities
Loans 350 450
Current liabilities
Trade payables 43 43
Taxation 29 36
Accruals 150 100
222 222 179 179
Total equity and liabilities 1,546 1,293

Note on Non-Current Assets

Land and Buildings Machinery Fixtures & Fittings Total
GH¢’000 GH¢’000 GH¢’000 GH¢’000
Cost or Valuation
At 31 December 20X8 830 470 197 1,497
Additions – 43 55 98
Disposals – (18) – (18)
Adjustment on revaluation 70 – – 70
At 31 December 20X9 900 495 252 1,647
Depreciation
At 31 December 20X8 (90) (270) (180) (540)
Charge for the year (10) (56) (8) (74)
Disposals – 12 – 12
Adjustment on revaluation 100 – – 100
At 31 December 20X9 0 (314) (188) (502)
Carrying Amount
At 31 December 20X8 740 200 17 957
At 31 December 20X9 900 181 64 1,145

You have been informed that included within distribution costs is GH¢4,000 relating to the loss on a disposal of a non-current asset.

Required
Prepare a statement of cash flows for Nordex Limited for the year ended 31 December 20X9.

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  • 20 Marks

FA – L1 – Q98 – Statement of cash flows

Prepare a statement of cash flows for Tango Limited for 20X9 using the direct method, based on provided financial statements.

The following information has been extracted from the financial statements of Tango Limited for the year ended 31 December 20X9.

Statement of profit or loss for the year ended 31 December 20X9

GH¢ GH¢
Sales
Cost of sales
Gross profit
Loss on disposal of non-current asset (4,000)
Wages and salaries (137,000)
Other expenses (including depreciation GH¢46,000) (193,000)
Interest charges (19,000)
Profit before tax
Tax on profit
Profit after tax

The asset disposed of had a carrying amount of GH¢31,000 at the time of the sale.

Extracts from the statements of financial position:

At 1 January 20X9 At 31 December 20X9
GH¢ GH¢
Non-current assets 157,000 142,000
Inventory 42,000 45,000
Receivables 43,600 51,000
Cash and cash equivalents 4,000 11,200
Trade payables 45,000 41,000
Taxation payable 10,000 12,000
Interest payable 3,000 2,000

Note on non-current assets

Land and buildings Machinery Fixtures & fittings Total
GH¢000 GH¢000 GH¢000 GH¢000
Cost or valuation
At 31 December 20X8 830 470 197 1,497
Additions – 43 55 98
Disposals – (18) – (18)
Adjustment on revaluation 70 – – 70
At 31 December 20X9 900 495 252 1,647
Depreciation
At 31 December 20X8 (90) (270) (180) (540)
Charge for the year (10) (56) (8) (74)
Disposals – 12 – 12
Adjustment on revaluation 100 – – 100
At 31 December 20X9 0 (314) (188) (502)
Carrying amount:
At 31 December 20X8 740 200 17 957
At 31 December 20X9 900 181 64 1,145

You have been informed that included within distribution costs is GH¢4,000 relating to the loss on a disposal of a non-current asset.

Required
Prepare a statement of cash flows for Tango Limited for the year ended 31 December 20X9.

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