NCI.

pe potcugnsAm FnNA Bu
moreimportant than profit
Gh is
得到钱才是真赚了 Towson hen on
Exercise 17.1: Cash Received from Customers yawn
At 30 June 2021, Ruby Ltd had net accounts receivable of $360,000. At 30 June 2022,
accounts receivable were $440,000 and sales for the year amounted to $1,500,000.
Doubtful debts expense was $75,000 for the year. Discount allowed was $45,000 for the
year.
Required
Calculate cash received from customers by Ruby Ltd for the year ended 30 June 2022.

Sales 1,500,000
Cash not received.
Less Discount Allowed 45,000
Less Doubtful Debts Expense 75,000 Cash not received.
Less Credit Sales 80,000
Increase in Net Accounts Receivable
Cash Received 1,300,000 ($440,000 – 360,000)

andfanson an
Iguanaand mounting
Exercise 17.2: Cash Payments to Suppliers
Purple Ltd had the following balances.

30 June 2021 30 June 2022

Inventories $ 510,000 $ 630,000
Accounts payable for inventories purchases 103,000 95,000

Cost of sales was $2,400,000 for the year ended 30 June 2022.
Required
Calculate cash payments to suppliers for the year ended 30 June 2022.

Cash Payments to Suppliers

Opening Inventory 510,000 Inventory purchased must be $2,520,000. It
Add Purchases ??? must all have been paid by cash because the
Accounts Payable account has declined
Less Cost of Sales (2,400,000)

= Closing Inventory 630,000

OR

Cash Payment to Suppliers

= Cost of Sales ($2,400,000) + Increase in Inventory ($120,000)
= $2,520,000

Accounts Payable has declined by $8,000, meaning that $8,000 has been paid to suppliers.
Therefore, total cash payments to suppliers = $2,528,000 ($2,520,000 + 8,000)

1
Exercise 17.3: Cash Received from Customers
At 30 June 2021, Orange Ltd had accounts receivable of $200,000. At 30 June 2022,
accounts receivable were $240 ,000 and sales for the year amounted to $2,100 ,000. Bad
debts amounting to $50 ,000 had been written off during the year, and discounts of
$17,000 had been allowed in respect of payments from customers made within prescribed
credit terms. Orange Ltd did not have an allowance for doubtful debts in either year.

Required
Calculate cash received from customers for the year ended 30 June 2022.

Sales 2,100,000
Sales that will never be
Less Discount Allowed (17,000) received in cash.
Cash to be received 2,083,000
Cash?? Credit??

Accounts Receivable (Opening Balance) 200,000

Less Bad debts written off (50,000)
150,000 Therefore, credit sales
must be $90,000.
Add Credit Sales ????

fitthatnextyear
Accounts Receivable (Closing Balance) 240,000

Therefore cash received from customers = $1,993,000 (e.g. 2,083,000 – 90,000).

OR

Sales ($2,100,000) – Discount Allowed ($17,000) – Bad Debts ($50,000) – Increase in

Accounts Receivable ($40,000)
= $1,993,0000

Exercise 17.5: Net Investing Cash Flows

The statement of financial position of Lily Ltd at 30 June 2022 recorded the following items.
30 June 2021 30 June 2022
Land, at independent valuation $ 500,000 $ 600,000
Plant, at cost 350,000 425,000
Accumulated depreciation (100,000) (140,000) theoretical
Investments at fair value through OCI 150,000 200,000 nonpayment
Goodwill 125,000
Too 100,000
Land revaluation surplus 100,000 170,000
Investments revaluation reserve 25,000 55,000
f30oooooo
Additional Information so tho how
Impairment of goodwill was $25,000 in the year ended 30 June 2022.
There were no acquisitions or disposals of land.
There were no disposals of plant or investments. ahfhnin.o
on fm i.no
i
no
The land revaluation surplus increase is net of deferred tax of $30,000.
The investments revaluation reserve increase for the year is net of deferred tax of $10,000.

2
Required
Prepare the investing section of the statement of cash flows for Lily Ltd for the year ended 30
June 2022.

We are only interested in cash inflow or cash outflow.

There were no acquisitions or disposals of land.
Therefore, there was no cash inflow or outflow. The
Item Cash flow ($) increase was merely an upward revaluation.
Land 0
Plant (75,000) No plant was sold. Therefore,
$425,000 – 350,000
Investments (10,000) = $75,000
Goodwill 0 = cash outlay for new plant

Net Cash Flow (Investing) (85,000) 花费

Investments Revaluation Reserve
Increase: 30,000
Goodwill is a non-cash expense. Add Tax: 10,000
Therefore, amount of upward revaluation = $40,000
But,
Value of Investments increased by $50,000.

Therefore, an additional $10,000 worth of

investments were acquired.

3
 Exercise 17.6
The following information has been compiled from the accounting records of Robin Ltd
for the year ended 30 June 2022.

gooutotbn
收⼊ onebadto
business
Required
Determine the amount of investing net cash outflows Robin Ltd would report in its
statement of cash flows for the year ended 30 June 2022. (LO5) Cost = 350,000
But vendor is supplying
$100,000 of the cost. This
$ amount will be repaid in two
Cash paid for land (250,000) years. Therefore, the cash
Cash paid for plant (250,000) outflow this year is $250,000.

Proceeds from sale of plant 42,000

The carrying amount is
Net investing cash flows (458,000) irrelevant. All that matters is
when cash comes in and when
cash goes out.

Exercise 17.12
A summarised comparative statement of financial position of Danica Ltd is presented below,
together with the statement of profit or loss and other comprehensive income for the year ended
30 June 2022.

30 June 2021 30 June 2022

Cash $ 30 000 $ 68 000

Trade receivables 46 000
136ooo 70 000
Inventories 30 000 32 000
Investments at fair value through OCI 35 000 No 40 000
Plant 125 000
Too 150 000
inow
Accumulated depreciation
inhalesin administration us
(23,000)
hi (35 000)
Deputationexpense $ 243 000 $ 325 000
soneedoddbad
Accounts payable
Accrued interest
$ 39 000
3 000
no $ 43 000
5 000
Current tax payable 10 000
no
000 12 000
Deferred tax liability —
加 1 500
Borrowings 货款
No
60 000 140，000 100 000 11500150⼆
Share capital 100 000 i.cahi 100 000

4
 30 June 2021 30 June 2022
Retained earnings 31 000 60 000
Investment revaluation reserve — 3 500
i和
$ 243 000 $ 325 000 you 张刊

DANICA LTD
Statement of profit or loss and other comprehensive income
for the year ended 30 June 2022
Sales $ 700,000
Cost of sales (483,000)
Gross profit 217,000
Distribution costs (62,000)
也要制ˇ Administration costs (74,000)
⼩
Interest (6,000)
Profit before tax 75,000
Income tax expense (23,000)
Profit for the year 52,000
Other comprehensive income
Gain on revaluation of investments (net of tax) 3,500
Total comprehensive income $ 55,500

Additional information

的是新买的
There were no disposals of investments or plant during the year.
A dividend of $23,000 was paid during the year.
因此增加
The deferred tax liability is in relation to investments.

Required
Using the direct method of presenting cash flows from operating activities, prepare a statement
of cash flows in accordance with AASB 107/IAS 7 for the year ended 30 June 2022.

5
 也的
Solution
shymmn
Receipts from customers
Sales
Less increase in Trade Receivables
Cash Received from Customers
Payments to suppliers and employees
Distribution costs
Administration costs
Payment to Supplier
Less
Depreciation Expense
Increase in Accounts Payable
Cash Paid to Suppliers and Employees
The increase in NET Trade Receivables means that
$24,000 worth of sales were on credit. Therefore, of
700,000 the $700,000 in sales, $676,000 was received in cash
(24,000) while $24,000 remains unpaid. In a Cash Flow
Statement, the only thing that matters is when cash is
676,000 received and when cash is paid, so the credit sales
need to be excluded.
Expenses of the period. There is no increase in
62,000 Accrued Expenses relating to Distribution or
Administration Costs therefore, they must have
74,000 been paid.
485,000 Purchases = Cost of Sales ($483,000) + increase in
inventory ($2,000)
This is a non-cash expense, but it is included within
(12,000) ‘Administration Costs’. Therefore, it needs to be
( 4,000) added back as it does not represent a cash payment.
This effectively reduces admin costs from $74,000
605,000 to $62,000.

Increase in Accounts Payable means that $4,000

Interest Paid worth of supplies/inventory was not paid for.
Interest Expense 6,000 Therefore, there is no cash out flow for this
purchase.
Less
This indicates that $2,000 worth of interest has not
Increase in Accrued Interest Expense (2,000) been paid.
4,000
Income Tax Paid
Income Tax Expense 23,000 This indicates that $2,000 worth of tax has not been
Increase in Income Tax Payable (2,000)
还没交 减掉
paid.

21,000

6
 DANICA LTD
Statement of cash flows
for the year ended 30 June 2022

Cash flows from operating activities $

Receipts from customers 676,000
show
Payments to suppliers and employees (605,000) youworking
Cash generated from operations 71,000
Interest paid (4,000)

舳 Income tax paid

Net cash from operating activities
(21,000)
46,000

Cash flows from investing activities

In exam Cash paid for plant
Net cash used in investing activities
(25,000)
(25,000)
There were no disposals,
therefore, the $25,000
($150,000 - $125,000)
increase relates to the
acquisition of new plant.
Cash flows from financing activities
A Proceeds from borrowings
Dividend paid
40,000
(23,000)
Cash inflow from loans
during the period $40,000
($100,000 - $60,000).
Net cash from financing activities 17,000
From the ‘Additional
Information’.
现⾦
Net increase in cash and cash 等价物
equivalents 38,000
Cash and cash equivalents at beginning of year 30,000 46,000 – 25,000 + 17,000

Cash and cash equivalents at end of year 68,000

7
 Exercise 17.13: Preparation of Statement of Cash Flows
A summarised comparative statement of financial position of Bronze Ltd is presented
below, together with a statement of profit or loss and other comprehensive income for the
year ended 30 June 2022.
30 June 2021 30 June 2022
Cash $ 45 000 $ 35 000
Trade receivables 69 000
136ooo105 000
Allowance for doubtful debts (3 000)
⼩了 ⽐ (6 000)
Inventories 45 000 67 000
Equity investments 53 000
Tho 60 000
Plant 187 000Tho 225 000
Own
Accumulated depreciation (35 000)Now (53 000)
$ 361 000 $ 433 000
Accounts payable $ 65 000 $ 75 000 Noooo
Accrued interest 5 000 7 000
Current tax payable 15 000
Tho
⼩3ooo 18 000 ghent
Deferred tax 30 000 37 000
tho oftaxhas
7000
beendefend
Borrowings 80 000 100 000
Share capital 100 000
Now
100 000
Investment revaluation reserve 2 000
170⽐拟
此 7 000
TJ no no
Retained earnings 64 000 89 000
$ 361 000 $ 433 000

BRONZE LTD
Statement of profit or loss and other comprehensive income
for the year ended 30 June 2022
Sales $ 1 035 000
Cost of sales (774 000)
Gross profit 261 000
Distribution costs (76 000)
Administration costs (96 000)
Interest expense (7 000)
Profit before tax 82 000
Income tax expense (24 000)
Profit for the year 58 000
Other comprehensive income
Gain on revaluation of investments (net of tax) 5 000
Total comprehensive income $ 63 000

8
Additional information
The movement in the allowance for doubtful debts for the year comprises:
Balance at 30 June 2021 $ 3 000
Charge for year 5 000
Bad debts written off (2 000)
Balance at 30 June 2022 $ 6 000

Equity investments are shares in other companies that are measured at fair value,
with increases/decreases being recognised in other comprehensive income, and
accumulated in the investment revaluation reserve until investments are sold.
There were no disposals of plant during the year.
A dividend of $33 000 was paid during the year.
There were no acquisitions or disposals of investments during the year.
Required
1. Using the direct method of presenting cash flows from operating activities, prepare a
statement of cash flows in accordance with AASB 107/IAS 7 for the year ended 30
June 2022.
2. Prepare the operating activities section of the statement of cash flows using the
indirect method of presentation.
(LO3, LO4 and LO5)

9
Receipts from customers
Sales 1,035,000 朓以叱 后的
Less 算䑀减掉 Increase in NET Trade Receivables ($99,000 -
$66,000). This amount represents credit sales.
Increase in Trade Receivables (33,000)
Doubtful Debts Expense (5,000) This is cash that has not been, and is unlikely to be,
received
Cash Received from Customers 997,000

Payments to suppliers and employees Expenses of the period. There is no increase in

Distribution costs 76,000 Accrued Expenses (relating to Distribution or
Administration Costs) therefore, they must have
Administration costs 96,000 been paid.
Increase in Inventory 796,000
Purchases = Cost of Sales ($774,000) + increase in
Inventory ($22,000)
Less
This is a non-cash expense, but it is included within
Depreciation Expense (18,000) ‘Administration Costs’. Therefore, it needs to be
Increase in Accounts Payable (10,000) added back as it does not represent a cash payment.
It effectively reduces the Administration Costs
Doubtful Debts Expense ( 5,000) from $96,000 to $78,000)
Cash Paid to Suppliers and Employees 935,000
This is a non-cash expense, but it is included within
‘Administration Costs’. Therefore, it needs to be
Interest Paid added back as it does not represent a cash payment.
Interest Expense 7,000
Less
This indicates that $2,000 worth of interest has not
Increase in Accrued Interest Expense (2,000) been paid.
5,000
Income Tax Paid
Increase in Tax Payable balance from $15,000 to $18,000.
Income Tax Expense 24,000 This indicates that $3,000 worth of tax has not been paid.
Increase in Income Tax Payable (3,000)
Less Deferred Tax (5,000)
Deferred Tax Payable increased from $30,000 to $37,000. This
16,000 indicates that $7,000 worth of tax has been deferred (and therefore
not paid). However, $2,000 of this amount pertains to the upward
⽉ revaluation of the equity investments (see below):

Equity Investments increased from $53,000 to $60,000 (i.e. $7,000).

long
The Investment Revaluation Surplus only increased by $5,000
(which is the amount excluding tax).
Therefore the deferred tax relating to the upward revaluation must
be $2,000. There is no cash flow effect associated with this so it is
excluded from the cash flow calculation.

10
 BRONZE LTD
Statement of cash flows
for the year ended 30 June 2022

Cash Flows from Operating Activities

Receipts from Customers 997,000
Payments to Suppliers and Employees (935,000)
Cash generated from operations 62,000
Interest Paid (5,000)
Tax Paid (16,000)
Net Cash from operating activities 41,000

Cash Flows from Investing Activities uniting

Cash Paid for Plant (38,000) $225,000 – 187,000
Net cash used in investing activities (38,000)

Cash Flows from Financing Activities

Proceeds from Borrowing 20,000 $100,000 – 80,000
Dividends Paid (33,000) From the question
Net cash used in financing activities (13,000)

Net change in cash and cash equivalents (10,000) $41,000 – 38,000 – 13,000
Cash and cash equivalents (Opening) 45,000
Cash and cash equivalents (Closing) 35,000

2.
Cash flows from operating activities $
Profit before tax 82 000
Interest expense 7 000
Depreciation expense 18 000
Increase in net receivables (33 000)
Increase in inventories (22 000)
Increase in accounts payable 10 000
Cash generated from operations 62 000
Interest paid (5 000)
Income tax paid (16 000)
Net cash from operating activities 41 000

11