 QUESTION 1
The table below lists a series of transactions. Referring to this table:
(a)
(b)
(c)
Identify the items as cash receipts and payments.
Classify the cash items into cash flows from operating, investing or
financing activities.
Complete a classified Statement of Cash Flows using the worksheet
below and calculate the closing cash position. The opening cash
position is $21,800
Transaction
Cash sales
Cash purchases
Credit purchase of goods
Credit sales
Cash received from Ac Rec
Cash paid to Ac payable
Wages and Salaries paid
Interest on loan paid
Other cash expenses
Depreciation
Bad debts
Dividends received
Paid taxes
Paid dividends
Final dividends approved
Van purchased for cash
Van sold for cash (carry am’t $6,000)
Sold shares in other co. (cost
$10,000)
Took out loan from bank
Issued shares for cash
Repaid loan
Amount
$
25,800
5,400
86,300
150,800
130,700
64,500
35,200
2,000
22,100
5,400
1,200
2,100
1,700
2,800
3,000
15,000
4,500
16,000
8,500
12,000
1,500
Receipt/
Payment
Operating /
Investing /
Financing
Statement of Cash Flows for the year ended
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase / (decrease) in cash
Plus opening cash position
Closing cash position
21,800
Question 2
CMU Limited is a long established business whose Directors are considering
selling shares to the public and are required amongst other things to produce
a Cash Flow Statement. The company’s bookkeeper has never prepared a
Cash Flow Statement before. The following Cash Flow Statement is the
confused and incorrect result with some items disclosed in the wrong places.
1) Rewrite the Cash Flow Statement, showing only the year 2012
figures.
2) The Statement shows that cash flow has increased for the year. Give the
two major sources of this increase.
CMU Limited
Cash Flow Statement
for the year ended 31 December 2012
Cash Flows from Operating Activities
Cash was provided from:
Receipts from customers
Proceeds from bank loans
Cash was disbursed to:
Payments to suppliers
Ordinary share dividends paid
Income tax paid
Net Cash Inflow from Operating Activities
2012
$’000
2012
$’000
2011
$’000
5,000
1,400
6,400
5,200
1,000
4,500
400
50
Cash Flows from Investing Activities
Cash was provided from:
Proceeds from issue of ordinary shares
400
Proceeds from sale of equipment
500
Cash was disbursed to:
Purchase of new equipment
100
Payments for expenses
1,000
Net Cash Outflow from Investing Activities
Cash Flows from Financing Activities
Cash was provided from:
Dividend received
Interest received
Cash was disbursed to:
Purchase of shares in XY Ltd
GST paid
Interest paid
Net Cash Outflow from Financing Activities
20
5
500
200
150
Net increase (decrease) in cash held
plus Cash Balance at the beginning of the year
Cash Balance at the end of the year
4,950
1,450
900
1,100
(200)
25
850
(825)
425
30
455
4,300
250
250
0
50
400
800
10
5
nil
250
100
2011
$’000
6,200
4,800
1,400
50
1,200
(1,150)
15
350
(335)
(85)
30
(55)