CASH FLOW STATEMENT CLASS EXAMPLE AND SOLUTION
Comprehensive example
Prepare the statement of cash flows of ABC Pty (Ltd) using the given statement of
comprehensive income and the statement of financial position. Prepare it using the direct
method and after calculating the following:
1.
Cash flow from operating activities:
1.
2.
3.
4.
Cash received from customers
Cash paid to suppliers and employees
Cash paid for interest
Cash paid for income taxes
1.
Cash flow from investing activities
2.
Cash flow from financing activities
Statement of comprehensive income of ABC (Pty) Ltd for the year ended 28 February
2014:
Revenue
Cost of sales
Gross profit
Other income - Gain on sale of equipment
Operating expenses
Salary and wages
Depreciation
Other operating expenses
Operating profit
Interest expense
Profit before tax
Tax expense
Profit after tax
2014
R’00
0
45 897
22 500
23 397
415
17 250
8 012
1 998
7 240
6 562
501
6 061
1 744
4 317
1
CASH FLOW STATEMENT CLASS EXAMPLE AND SOLUTION
Statement of financial position of ABC (Pty) Ltd as at
28 February 2014:
2014
R’000
2013
R’000
Non-current assets
Property, plant and equipment
19 493
19 735
Land and buildings
8 523
8 523
Equipment*
17 968
17 235
Accumulated depreciation - Equipment
(6 998)
(6 023)
Current assets
12 225
11 139
Inventory
7 884
6 655
Accounts receivable
2 024
1 735
Cash and cash equivalents
2 003
2 351
Prepaid expenses
314
398
TOTAL ASSETS
31 718
30 874
Equity
15 738
14 394
Share capital
7 500
8 700
Retained earnings
8 238
5 694
Borrowings
6 150
7 020
Current liabilities
9 830
9 460
Accounts payable
9 598
9 211
Accrued interest
120
149
SARS
112
100
31 718
30 874
Liabilities
Non-current liabilities
TOTAL EQUITY AND LIABILITIES
*During 2014 ABC (Pty) Ltd purchased new equipment for a total cost of R2.6 million. No items
impacted retained earnings other than net profit and dividends.
2
CASH FLOW STATEMENT CLASS EXAMPLE AND SOLUTION
SOLUTION:
3