ADVANCED CASES FOR CFS - TESTBANK CASE 1

CASE 1:
Step 1: Read all additional information/Notes to note OCF, ICF or FCF
Step 2: Explore IS in short given form and compute the Changes in CA and CL
Step 3: find the movement of Cash and Cash equivalents for the year:
x2 x1
Cash 37,470 3,800
Gov bonds (note 9) 40,000 10,000
Bank overdraft 51,200 27,230
Delta/changes of cash and cash equivalents 26270.000 - 13,430
OCF + ICF + FCF = 39,700
Step 4: OCF calculation: indirect method
Profit before tax 1 730,040
Adjustments:
1/Non-cash items:
Depreciation ex 232,900 Note 2
Amortisation ex 21,200 Self-compute
Impairment loss 20,000 note 8
Bad debts ex (if any)
2/Non-operating items:
Investments income(if any)
Gain/loss retire bonds (if any)
Gain on disposal of Intangibles - 7,000 Self-compute
Loss on disposal of PPE 84,810 Self-compute
Finance cost (Interest ex) 89,600 IS
3/Changes in CA and CL:
Delta of Inv - 144,490 ok
Delta of TR - 118,550 ok
Movements of Trade payables - 3,100 ok
Cash from operations 905,410
Tax paid (cash payment) 2 - 236,420 ok
Interest paid (cash payments) 3 - 92,200 ok
Net OCF 576,790

bởi vì chúng ta bắt đầu điều chỉnh từ lợi nhuận trc thuế đã trừ lãi nên h phải cộng ngc lại Cp lãi vay, nêu k thì A34 sẽ
vì số liệu hỗn hợp nên chúng ta kết hợp vs nhau

FCF: analyze NCL and Equity accounts Borrowings (ST and LT)
 -

Fully explained
Share capital

Bonus issue: 10 for 1:

From T accounts, We know there is addition

FCF = 126,800 + 209,000 + 75,000 - 231,640

OCF + ICF + FCF =
 PPE (net book value) Intangibles (NBV)
797,500 386,900
127,800 (note 1) 251,340 17,000 Note 4
13,900 232,900 Note 4 20,000 Note 8
X??? Y??? Amortisation ex

982,600 580,040

x = 531,900 Y = 21,200 OCF

Book entries to find Gain/loss from retiring PPE/Intangibles:
Disposing PPE (note 1):
Dr Cash 42,990 ICF Cash payment for Purchasing
Dr Loss from disposal of Ppe 84,810 OCF Dr Ppe
Cr Cash
Cr PPE - NBV 127,800 Cash payment for purchasing
Disposing Intangibles (note 4) Dr Intangibles
Dr Cash 24,000 ICF Cr Cash
Cr Gain on disposal of Intangibles 7,000 OCF
Cr Intangibles 17,000

lại Cp lãi vay, nêu k thì A34 sẽ ICF:

Cash receipts from disposing PPE: 42,990
Cash receipts from disposing intangibles: 24,000
Cash payments for purchasing PPE: - 531,900
Cash payments for purchasing Intangibles: - 251,340
Net ICF = - 716,250
Borrowings (ST and LT) Preference shares
474,000 FCF -
 X = 75,000
(cash receipts
Dr Cash 209,000 Dr Cash 75,000
X = 209,000 from issuing
(cash receipts preference
from borrowings Cr Borrowi 209,000 share) Cr P.S 75,000

683,000 75,000
Fully explained
Share capital
232,800 Share premium retained earnings
351,000
23,280 bonus issue
Y? div paid
Z1? = 56,320 23,280 Z2? = 70,480 =231,640
bonus issue
312,400
398,200

s issue: 10 for 1:
10 old shares: 1 new shares Declare and paid dividends:
232,800 shares 23,280 new shares 1 pound each share Dr Retained earnings
Cr Div payables
Dr Share premium 23,280 Dr Div payables
Cr Share capital 23,280 Cr Cash

T accounts, We know there is additional issue of shares:

Dr Cash 126,800 FCF Present FCF:
Cr SC 56,320 Cash receipts from borrowings
Cr SP 70,480 ….

126,800 + 209,000 + 75,000 - 231,640 = 179,160

+ ICF + FCF = 39,700
 Tax payable Tax Ex
192,520

X1? 245700.000 Tax ex on IS 245,700

201,800

236420.000

sh payment for Purchasing PPE:

531,900
531,900 ICF
sh payment for purchasing Intangibles:
Intangibles 251,340
251,340 ICF
 FCF

retained earnings
282,100

NI = 484,340

534,800

231,640
231,640
231,640
231,640 FCF
Interst Payable (Accrual payable) Final cost
12,350
89,600 89,600

9,750
 x2 x1
Cash 180000 20200
Gov bonds (note 9) 105000 100000
Delta/changes of cash and cash equivalents 285000 120200
OCF + ICF + FCF =

Step 4: OCF calculation: indirect method

Profit before tax 1 866100
Adjustments:
1/Non-cash items:
Depreciation ex
Amortisation ex
Impairment loss
Bad debts ex (if any)
2/Non-operating items:
Investments income(if any)
Gain/loss retire bonds (if any)
Gain on disposal of Intangibles
Loss on disposal of PPE
Finance cost (Interest ex)
3/Changes in CA and CL:
Delta of Inv
Delta of TR
Movements of Trade payables
Cash from operations
Tax paid (cash payment) 2 - 347,600
Interest paid (cash payments) 3 - 84,000
Net OCF
Tax payable Interst Payable (Accrual payable) PPE (net book value)
350,000 5,000 2,950,300
89,000 2,057,000
297,600
600,000

300,000 10,000 4,360,400

### 84000.000

Dr PPE
Cr Cash
Dr PPE
Cr Loan
Dr loss on dispol
Dr Cash
Cr PPE
PPE (net book value) Investment
156,000

750,600

172,000
496300.000

2,057,000
2,057,000
600,000
600,000
55000
441300
496300