28.10 J.

White
Statement of cash flow for the year ended 31 March 20x9
$ $
Cash flow from operating activities
Profit before tax
Adjustment for:
Add: Depreciation - shop
Add: Depreciation - motor vehicle
Stock
Receivable
Payable 0
Net cash flow from operating activities 0

Cash flow from investing activities

Purchase of shop fittings

Cash flow from financing activities

Drawing
Net cash flow 0
Bank balance as at 1/4/x4
Bank balance as at 31/3/x5 0
Depreciation is a non-CF item
Depreciation has been deducted fr profit
28.11 T Bone
Statement of cash flow for the year ended 30 June 20x1
$ $
Cash flow from operating activities
Profit before tax

Adjustment for:
Add: Depreciation for motor vans
Add: Loss on disposal of motor van
Add: Allowance for Irrecoverable Receivable 0

Add: Loan interest (to show as financing item)

Loan interest
Stock
Receivable
Trade payable 0
Net cash flow from operating activities 0

Cash flow from investing activities

Purchase of motor van
Proceed for the disposal of motor van 0

Cash flow from financing activities

Drawing
Loan interest
Loan 0
Net cash flow 0
Bank balance as at 1/7/x0
Bank balance as at 30/6/x1 0

Motor vans (debit balance)

Date $ Date

0
1/7/x1 Balance b/d

Accumulated depreciation - Motor vans (credit balance)

Date $ Date

Disposal of motor van

Date $ Date
 0

Allowance for Irrecoverable Receivable

Date $ Date

0
1/7/x1

1/7/x0 1/7/x1
Trade receivable (Balancing figure)
Less: allowance for IR 0 0
Extracted from balance sheet
 Dep, loss on disposal & allowance has been deducted from profit
All these items are non-CF items, since it was deducted from the profit, should add back

External share + buy asset

Own share & external loan

bit balance)
$

Motor vans (credit balance)

$

motor van
$
 0

erable Receivable
$

0
Balance b/d 0
28.13 A Jack
Statement of cash flow for the year ended 30 June 20x1
$000 $000
Cash flow from operating activities
Profit before Tax
Adjustment for:
+ Depreciation
+ Interest
Stock
Receivable
Trade payables 0
Net cash flow from operating activities 0

Cash flow from investing activities - ext equity or buy/sell assets

Purchase of Land and Buildings
Purchase of Plant and Equipments 0

Cash flow from financing activities - own equity or ext loan

Capital
Drawings
Interest paid
Loan received 0
0
Bank Balance as at 1/07/20x0
Bank Balance as at 30/6/20x1 0
28.16 C.F. Ltd
Statement of cash flow for the year ended 31 December 20x9
$ $
000 000
Cash flow from operating activities
Profit before tax 59

Adjustment for:
+ Depreciation (non-CF item)(Opening 56 - closing 90) 34
Increased Receivable (Opening 33 - closing 40) -7
Increased Stock (Opening 42 - closing 50) -8
Increased Trade payable (opening 24 - closing 33) 9
+ Debenture interest paid (to show as financing) 12 99
Cash generated from operating activity 99
Tax 20x8 (paid in 20x9) -17
Net cash generated from operating activity 82

Cash flow from investing activities

Purchase of Equipment (Opening 180 - closing 270) -90

Cash flow from financing activities

Dividend 20x8 -28
Issuance of equity shares (opening 20+8 - closing 25+10) 7
Issuance of debenture (Opening 60 - closing 80) 20
Debenture interest paid -12 -13
Net cash flow -21
Cash balance at 1/1/20x9 11
Bank overdraft balance at 31/12/20x9 -10

Computation of profit before interest & tax

Increase in retained earning (opening 81 - closing 93) 12
+ Dividend 20x8 28
+ Tax 20x9 (to be paid 20x10) 19
Profit before tax 59

Property, plant & equipment (debit balance)

Date $ Date

Provision for depreciation - PPE (credit balance)

Date $ Date

0
 Retained earnings (credit balance)
Date $ Date

Share Capital (credit balance)

Date $ Date

Share Premium (credit balance)

Date $ Date

0
 Profit less depreciation already, to add back now because this is a non cash item. We don't pay depreciation

Profit less interest already, to add back for showing as financing item

to add back to profit in order to show as an outflow

debit balance)
$

(credit balance)
$

0
 balance)
$

alance)
$

balance)
$

0
pay depreciation
28.19 Euston Ltd
Statement of cash flow for the year ended 31 December 20x9
$000 $000
Profit before tax
+ Dividend 20x8
+ Tax 20x9 (to be paid in 20x10)
+ Debenture interest (show as financing)

Cash flow from operating activities

Adjustment for:
Less: Profit on disposal
Add: Depreciation
Trade receivables
Stock
Prepayments
Trade payables
Accruals 0
Cash generated from operating activity 0
Tax paid for 20x8
Net cash generated from operating activity 0

Cash flow from investing activities

Purchase of plant &machinery
Sale proceeds from sale of non-current asset 0

Cash flow from financing activities

Dividend 20x8
Debenture interest paid
Debenture loan 0
Net cash flow 0
Balance as at 1/1/x9
Balance as at 31/12/x9 0

Plant & Machinery at cost (debit balance)

Date $000 Date

0
1/1/x10 Balance b/d 0

Provision for Depreciation - Plant & Machinery (credit balance)

Date $000 Date

0
 1/1/x10

Disposal of Plant & Machinery

Date $000 Date

0
 Easiest to score - just extract from balance sheet
Easiest to score - just extract from balance sheet

cost (debit balance)

$000

& Machinery (credit balance)

$000

0
 Balance b/d 0

& Machinery
$000

0
28.20 Waterloo plc
Statement of cash flows for the year ended 30/9/20x1
$000 $000
Cash flows from operating activities
Adjusted profit before tax
+ Dividends
+ Loss on disposal
+ Depreciation
Stock
Trade receivables
Trade payables 0
0
Cash flows from investing activities

Cash flows from financing activities

0
Net cash flow 0
Bank balance as at 1/10/x0
Overdraft balance as at 30/9/x1

Plant & Machinery

Date $000 Date

Provision for Depreciation - Plant & Machinery

Date $000 Date

0
1/1/x2

Disposal of Plant & Machinery

Date $000 Date

0
 Retained earnings
Date $000 Date

0
chinery
$000

n - Plant & Machinery

$000

0
Balance b/d 0

& Machinery
$000

0
arnings
$000

0
28.21 Higher Ltd
Statement of cash flow for the year ended 31 March 20x1
$ $
000 000
Cash flow from operating activities
Profit before tax
+ Depreciation
- Gain on disposal of NCA
Inventories
Trade receivables
Current liabilities 0
Net cash generated from operating activity 0

Cash flow from investing activities

Purchase of non-current asset
Disposal Proceeds for non-current asset 0

Cash flow from financing activities

Preference shares redemption
Shares issued 0
0
Balance at 1/4/20x0
Balance at 31/3/20x1 0

Non-current asset at cost (debit balance)

Date $000 Date

0
1/4/x1 Balance c/d 0

Provision for Depreciation - non-current asset (credit balance)

Date $000 Date

0
1/4/x1

Disposal of non-current assets

Date $000 Date

Retained earnings (credit balance)

Date $000 Date

0
1/4/x1

Capital redeemption reserve (credit balance)

Date $000 Date

0
1/4/x1
 Non cash flow item
Non cash flow item

Dr. Bank Cr. Equity 10 (90-80) Dr. Bank Cr. Share Premium 5 (25-20)

ost (debit balance)

$000

current asset (credit balance)

$000

0
Balance b/d 0

current assets
$000

(credit balance)
 $000

0
0

erve (credit balance)

$000

0
Balance b/d (credit balance) 0
Worked example 28.3
Disposal of Non-current assets (calculate gain or loss of the disposal)
Date $ Date
31/3/x1 Non-current assets (asset account - debit balance) 8,000 31/3/x1

8000

Non-current assets (asset account - debit balance)

Date $ Date
1/4/x0 Balance b/d 173,000 31/3/x1

173,000
Balance b/d 165,000

Provision for depreciation - Non-current assets (credit balance)

Date $ Date
31/3/x1 Disposal of Non-current assets (calculate gain or loss of t 3800 1/4/x0
Balance c/d 52000
55800
calculate gain or loss of the disposal)
$
Bank / Cash flow statement 3500 Step 3
Provision for depreciation - Non-current assets (credit bala 3800 Step 2 Cost 8000, written down value 4200, Provision f
Profit or Loss - loss 700 Step 4
8000

set account - debit balance)

$
Disposal of Non-current assets (calculate gain or loss of the 8,000 Step 1
Balance c/d 165,000
173,000

on-current assets (credit balance)

$
Balance b/d 46000
P & L - depreciation 9800
55800
Balance b/d 52000
n value 4200, Provision for dep 8000-4200