Paper F7



Paper F7

Question 3 guide

Cash Flow Statement

| |£'000 |

|Net Cash from Operating Activities Part 1 |X |

|Net Cash From Investing Activities Part 2 |X |

|Net Cash From Financing Activities Part 3 |X |

|Net Increase /(decrease) in Cash and Cash Equivalents |X |

|Cash and Cash Equivalents at Beginning of the Period |X |

|Cash and Cash Equivalents at End of Period |X |

Part 1: Finding Cash Flows from Operating Activities

| |£'000 |£'000 |

|Profit Before Taxation | |X |

|Adjustments: For non cash Activity | | |

|ADD: Depreciation charged for the year |X | |

|ADD: Accruals Expense (Opening + expenditure – closing) |X | |

|ADD: Expense from Provision |X | |

|LESS: Profit on Sale of Asset (sometimes needs calculation) |(X) | |

|ADD: Loss on Sale of Asset (sometimes needs calculation) |X | |

|LESS: Prepayments |(X) | |

|LESS: Release of government grant (Ope. + cash received – Clo) |(X) |X |

|Adjustments: For non operating Activity | | |

|LESS: Investment Income (added back to Investing Activities) |(X) | |

|ADD: Interest Expense (reduced back at bottom) |X | |

|LESS: Interest Income (added back to Investing Activities) |(X) |X |

|Adjustments: For Operating Activities | | |

|ADD: Increase in Payables |X | |

|ADD: Decrease in Inventories |X | |

|ADD: Decrease in Receivables |X | |

|LESS: Decrease in Payables |(X) | |

|LESS: Increase in inventories |(X) | |

|LESS: Increase in Receivables |(X) | |

|Less: Interest Paid (Op Acc Int + provision – clos Acc Int) | |(X) |

|Less: Dividends Paid (RE Opening + Profit for the period – RE Closing) | |(X) |

|Less: Income Taxes Paid (Op + Op def + Prov in P/L – Clos – clos def) | |(X) |

|Net Cash from Operating Activities | |X |

Part 2: Finding Cash Flows from Investing Activities

| |£'000 |

|LESS: Cash Payments for Acquired Fixed Assets (Purchases) see below |(X) |

|LESS: Cash Payments for Acquired Investments |(X) |

|LESS: Cash Payments to Acquire Shares and Debentures of others |(X) |

|LESS: Cash Advances to Other Parties |(X) |

|ADD: Receipts of Sales of Assets (Disposals) see below |X |

|ADD: Receipts from Sales of Investments |X |

|ADD: Cash received from Government Grant |X |

|LESS: Development Expenditure |(X) |

|Net Cash from Investing Activities |X |

|Finding Purchases= |Finding Receipt of Disposal |

|Opening Bal X |Opening Bal X |

|Purchases ? |Purchases X |

|Revaluation X |Revaluation X |

|X |X |

|Disposals X |Disposals ? |

| | |

|Closing Bal X |Closing Bal X |

|X |X |

| | |

| |Opening Bal dep X |

| |Dep. Of disposal ? |

| |___ |

| |X |

| | |

| |Closing Bal Dep X |

| |Dep. Charge for year X |

| |X |

| | |

| |NBV Disposals ( disposals – depreciation) |

| |X |

| |Net Profit/(loss) reported |

| |X/(X) |

| |Proceeds from disposal |

| |X |

Part 3: Finding Cash Flows from Financing Activities

| |£'000 |

|Add: Issues of Share Capital in Cash Step 1 |X |

|Add: Issue of Debenture, Loans notes, Bonds, Mortgages, and other borrowings Step 2 |X |

|Less: Cash Repayments of Debentures Step 2 |(X) |

|Less: Repayments of amounts borrowed under finance lease Step 3 |(X) |

|Net Cash from Financing Activities |X |

Step 1: Finding Issue of share Capital

Add: Share Capital Closing X

Add: Share Premium X

Less: Share Capital Opening (X)

Less: Share Premium Opening (X)

Shares Issued X

Step 2: Finding Issue or Payment of debentures etc

Add: Closing balance X

Less: Opening (X)

Issue/ (Payment) X/(X)

Step 3: Finding Repayments of amounts borrowed under Finance lease

| |Opening Bal X |

|Capital Repayment ? |Additions |

|Closing Bal |X |

|X |__ |

|X |X |

Note: If Bank has a credit balance then that means that there is a Bank overdraft

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