BUS 20283 Topic 7 Tutorial Assignment - Cash Flows Question 4) BUS 20283 Topic 7 Tutorial Assignment - Cash Flows The balance sheets of Funnies Ltd for the years ended 30 June 20X2 and 20X3 are as follows: Additional Information Funnies Ltd. Statement of financial position as at 30 June 20X34 The income statement for the year ended 30 June 20X3 is as follows: 20X3 20x24 $ 71.280 $ $ Property, plant and equipment Premises 37,000 38,000 Net sales Less expenses: Depreciation Profit on disposal of equipment Loss on disposal of cars Debenture interest Operating profits before tax 7,000- (430) 740 3,000- 60.970- Equipment Cars 45,800 18.930 17,600 14,080 101,730 69,6804 Long term investment Shares 25,000 17,000 Less: taxation Profit after tax 10,000 50.970 e Current Assets Stocks Debenture interest incurred for the year has been paid. 49,6704 17,500 (111) Proposed dividend declared on 1 July 20X3 is $20.000.- Debtors 6 month fixed deposit Cash & bank balances 71,960 4,800 700 127,130 14,410 3,600 1,800 37,3104 (iv) The value of the P.P.E. at disposal on 1 July 20X2 was: Equipment Cars $5,2004 $2.010 Less: current liabilities Trade creditors 32,050 20,950 (v) The depreciation of $7,000 was represented by: Bank overdraft Taxation 10,000 28,2004 14.000 63,1504 Premises Equipment Cars $1,000 $3,000 $3,000 42,050 Net current assets/ (liabilities) 85,080 211.810 (25,840 60.840 (vi) The company revalued all P.P.E. on 30 June 20X2 and recognized a revaluation deficit. Shareholders' equity Ordinary shares 50,000 30,000 Required: Retained Earnings / Accum. losses) 41.810 91,810 (9,160 20,8404 Using indirect method, prepare a statement of cash flows of Funnies Ltd for the year ended 30 June 20X3 and show an extract of notes to financial statements as required under HKAS 7. Long-term liabilities 5% debentures 60,000 20,000 I Long-term loan 60,000 211.810 20.000 60.8404 BUS 20283 Topic 7 Tutorial Assignment - Cash Flows BUS 20283 Topic 7 Tutorial Assignment - Cash Flows Pro-forma Statement of Cash Flows Indirect method: ABC Ltd. Statement of cash flows for the year ended 20X72 Direct method: ABC Ltd. Statement of cash flows for the year ended 20X7 $'000 $'000- $.000 Cash flows from operating activities Profit before interest and taxation $.000 XXX Cash flows from operating activities Cash receipts from customers XXX XXX Cash paid to suppliers Cash paid for other operating expenses Cash generated from operations Interest received* Dividends received* Interest paid* Dividends paid* Income taxes paid Net cash generated from/used in operating activities XXX XXX XXX Adjustments for: Depreciation / Amortisation Impairment loss Investment income Profit/(loss) on sale of fixed assets Operating profit before working capital changes Increase in trade receivables Decrease in inventories Decrease in trade payables Increase in accrued expenses Cash generated from operations Interest received* Dividends received Interest paid* Dividends paid* Income taxes paid Net cash generated from/used in operating activities XXX Cash flows from investing activities Purchase property, plant and equipment XXX xxx Xxx Proceeds from sale of equipment Taxes paid due to investments Interest received Dividends received* Net cash generated from/used in investing activities XXXe XXX Cash flows from investing activities Purchase of property, plant and equipment Cash flows from financing activities Proceeds from issuance of share capital XXX Proceeds from sale of equipment Taxes paid due to investments Interest received Dividends received Net cash generated from/used in investing activities XXX XXX XXX Proceeds from long-term borrowings Interest paid Dividends paid* Net cash generated from/used in financing activities XXXe Cash flows from financing activities Proceeds from issuance of share capital XXXe Net increase/decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Xxx XXX Xxx XXX XXX * This could also be shown as an operating cash flow subject to the nature of transaction or businesse e.g. financial institutions. Proceeds from long-term borrowings Interest paid* Dividends paid* Net cash generated from/used in financing activities Net increase/decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period XXX * Thir could Teach for chiant to the natura The following notes are required to both versions of the statement of cash flows: Notes to financial statements- (a) Cash and cash equivalents consist of cash on hand and balances with banks, and investments in money market instruments. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts. Cash on hand and balances with banks Short term investments Cash and cash equivalents as previously reported Effect of exchange rate changes Cash and cash equivalents 20X7 $'000 XXX XXX XXX (XXX) XXX 20X6 $'000 XXX XXX XXX (XXX) XXX (b) The company has an undrawn borrowing facilities of $XXX of which only $XXX may be used for future expansion. (C) Cash and cash equivalents at the end of the period include deposits with banks of $XXX held by a subsidiary that are not freely remissible to the holding company because of currency exchange restrictions. BUS 20283 Topic 7 Tutorial Assignment - Cash Flows Question 4) BUS 20283 Topic 7 Tutorial Assignment - Cash Flows The balance sheets of Funnies Ltd for the years ended 30 June 20X2 and 20X3 are as follows: Additional Information Funnies Ltd. Statement of financial position as at 30 June 20X34 The income statement for the year ended 30 June 20X3 is as follows: 20X3 20x24 $ 71.280 $ $ Property, plant and equipment Premises 37,000 38,000 Net sales Less expenses: Depreciation Profit on disposal of equipment Loss on disposal of cars Debenture interest Operating profits before tax 7,000- (430) 740 3,000- 60.970- Equipment Cars 45,800 18.930 17,600 14,080 101,730 69,6804 Long term investment Shares 25,000 17,000 Less: taxation Profit after tax 10,000 50.970 e Current Assets Stocks Debenture interest incurred for the year has been paid. 49,6704 17,500 (111) Proposed dividend declared on 1 July 20X3 is $20.000.- Debtors 6 month fixed deposit Cash & bank balances 71,960 4,800 700 127,130 14,410 3,600 1,800 37,3104 (iv) The value of the P.P.E. at disposal on 1 July 20X2 was: Equipment Cars $5,2004 $2.010 Less: current liabilities Trade creditors 32,050 20,950 (v) The depreciation of $7,000 was represented by: Bank overdraft Taxation 10,000 28,2004 14.000 63,1504 Premises Equipment Cars $1,000 $3,000 $3,000 42,050 Net current assets/ (liabilities) 85,080 211.810 (25,840 60.840 (vi) The company revalued all P.P.E. on 30 June 20X2 and recognized a revaluation deficit. Shareholders' equity Ordinary shares 50,000 30,000 Required: Retained Earnings / Accum. losses) 41.810 91,810 (9,160 20,8404 Using indirect method, prepare a statement of cash flows of Funnies Ltd for the year ended 30 June 20X3 and show an extract of notes to financial statements as required under HKAS 7. Long-term liabilities 5% debentures 60,000 20,000 I Long-term loan 60,000 211.810 20.000 60.8404 BUS 20283 Topic 7 Tutorial Assignment - Cash Flows BUS 20283 Topic 7 Tutorial Assignment - Cash Flows Pro-forma Statement of Cash Flows Indirect method: ABC Ltd. Statement of cash flows for the year ended 20X72 Direct method: ABC Ltd. Statement of cash flows for the year ended 20X7 $'000 $'000- $.000 Cash flows from operating activities Profit before interest and taxation $.000 XXX Cash flows from operating activities Cash receipts from customers XXX XXX Cash paid to suppliers Cash paid for other operating expenses Cash generated from operations Interest received* Dividends received* Interest paid* Dividends paid* Income taxes paid Net cash generated from/used in operating activities XXX XXX XXX Adjustments for: Depreciation / Amortisation Impairment loss Investment income Profit/(loss) on sale of fixed assets Operating profit before working capital changes Increase in trade receivables Decrease in inventories Decrease in trade payables Increase in accrued expenses Cash generated from operations Interest received* Dividends received Interest paid* Dividends paid* Income taxes paid Net cash generated from/used in operating activities XXX Cash flows from investing activities Purchase property, plant and equipment XXX xxx Xxx Proceeds from sale of equipment Taxes paid due to investments Interest received Dividends received* Net cash generated from/used in investing activities XXXe XXX Cash flows from investing activities Purchase of property, plant and equipment Cash flows from financing activities Proceeds from issuance of share capital XXX Proceeds from sale of equipment Taxes paid due to investments Interest received Dividends received Net cash generated from/used in investing activities XXX XXX XXX Proceeds from long-term borrowings Interest paid Dividends paid* Net cash generated from/used in financing activities XXXe Cash flows from financing activities Proceeds from issuance of share capital XXXe Net increase/decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Xxx XXX Xxx XXX XXX * This could also be shown as an operating cash flow subject to the nature of transaction or businesse e.g. financial institutions. Proceeds from long-term borrowings Interest paid* Dividends paid* Net cash generated from/used in financing activities Net increase/decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period XXX * Thir could Teach for chiant to the natura The following notes are required to both versions of the statement of cash flows: Notes to financial statements- (a) Cash and cash equivalents consist of cash on hand and balances with banks, and investments in money market instruments. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts. Cash on hand and balances with banks Short term investments Cash and cash equivalents as previously reported Effect of exchange rate changes Cash and cash equivalents 20X7 $'000 XXX XXX XXX (XXX) XXX 20X6 $'000 XXX XXX XXX (XXX) XXX (b) The company has an undrawn borrowing facilities of $XXX of which only $XXX may be used for future expansion. (C) Cash and cash equivalents at the end of the period include deposits with banks of $XXX held by a subsidiary that are not freely remissible to the holding company because of currency exchange restrictions