TODAY’S LESSON

Preparing cash flow statement

Statement of cash flows for the year ended 30 June 2011 Notes
Cash-flows from operating activities IAS 7:
CASHFLOWS FROM OPERATING ACTIVITIES
Operating profit 686000 -cash generated from trading activities
Depreciation 786000 -adjustments for non cash items eg depreciation
Profit on disposal (15000) -changes in working capital (current assets and
current liabilities)
Increase in inventory (214000)
Increase in trade receivables (278000) CASHFLOWS FROM INVESTING ACTIVITIES
-cash inflows/outflows from disposal/ purchase of
Increase in trade payables 60000
non current assets+ long term investments
-dividend received
339000
CASHFLOWS FROM FINANCING ACTIVITIES
- Sources of finance- shares+ long term liabilities
Cash generated from operations 1025000 - Dividends paid
Less interest paid (225000)
Less taxation paid (94+103-103) (94000)

Net cash flow from operating activities 706000

Statement of cash flows for the year ended 30 June 2011
Net cash flow from operating activities 706000 Notes
Cash flow from investing activities CASHFLOWS FROM INVESTING ACTIVITIES
-cash inflows/outflows from disposal/ purchase of
Purchase of non current assets (3439000)
non current assets+ long term investments
Cash received on disposal (40+15-25) 30000 -dividend received

CASHFLOWS FROM FINANCING ACTIVITIES

Net cash flow from investing activities (3409000) - Sources of finance- shares+ premium + long term
Cash flows from financing activities liabilities
Dividends paid(40+160-80) (120000) - Dividends paid
non current assets
Issue of shares (2000-1000+50) 1050000 - balance b/d 2576 disposal 15
debentures (2500-1000) 1500000 - Purchase 3439 depreciation 786
Net cash flow from financing activities 2430000 bal c/d 5214
6015 6015
Net decrease in cash & cash equivalents (273000)
+ Cash & cash equivalents at start of the 78000
year
Closing balance of cash & cash equivalents (195000)