ACT B332F Company Accounting II HKAS 7 Statement of Cash Flows
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ACT B332F Company Accounting II
HKAS 7 Statement of Cash Flows
Tutorial Exercises
Question 1
What are the advantages of including the Statement of Cash Flows in the Corporate Annual Report?
Question 2
The financial statements of Plate Limited for the financial year 1 are as follows:
Statement of Financial Position at 31 December Year 1 Year 0
|
|
$m |
$m |
|
ASSETS |
|
|
|
Non-Current Assets |
|
|
|
Intangible assets |
277 |
234 |
|
Tangible assets |
1,023 |
600 |
|
Financial assets |
220 |
200 |
|
|
1,520 |
1,034 |
|
|
|
|
|
Current Assets |
|
|
|
Inventories |
246 |
128 |
|
Trade Receivable |
509 |
335 |
|
Short-term investments |
50 |
30 |
|
Total current assets |
805 |
493 |
|
|
|
|
|
Total assets |
2,325 |
1,527 |
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Ordinary shares capital |
476 |
401 |
|
Revaluation surplus |
251 |
- |
|
Retained profits |
116 |
26 |
|
|
843 |
427 |
|
|
|
|
|
Non-current liabilities |
|
|
|
Long-term bank loans |
759 |
557 |
|
|
|
|
|
Current liabilities |
|
|
|
Bank overdraft |
388 |
185 |
|
Trade payables |
244 |
311 |
|
Interest payables |
49 |
22 |
|
Tax payables |
42 |
25 |
|
Total current liabilities |
723 |
543 |
|
Total liabilities |
1,482 |
1,100 |
|
|
|
|
|
Total equity and liabilities |
2,325 |
1,527 |
The statement of profit or loss and other comprehensive income
for the year ended 31 December Year 1
|
|
$m |
|
Revenue |
1,162 |
|
Cost of goods sold |
(866) |
|
Gross profit |
296 |
|
Distribution costs |
(47) |
|
Administrative expenses |
(110) |
|
Net profits before interest and tax |
139 |
|
Interest Income |
79 |
|
Finance cost |
(55) |
|
Profit before tax |
163 |
|
Taxation |
(24) |
|
Profit for the period |
139 |
|
Retained profit as at 1 January Year 1 |
26 |
|
Dividend paid |
(49) |
|
Retained profit as at 31 December Year 1 |
116 |
Other supplemental information:
1. The operating profit is after charging depreciation on the non-current asset of $22 million and amortization on the intangible non-current assets of $7 million.
2. During the year ended 31 December Year 1, plant and machinery costing $1,464 million, net book value of $244 million, was sold for $250 million.
3. During the year, some financial assets were written down by $15m to reflect the permanent diminution in value. Additional financial assets were purchased on 31 December Year 1 for $40m. Other financial assets were disposed of for a value of $50m during year.
4. During the year ended 31 December Year 1, 25 million shares were issued at $3.0.
Required:
(a) Prepare the statement of cash flows for Plate Limited for the year ended 31 December Year 1, using indirect method.
(b) Explain the treatment of depreciation charge and of the dividends paid.
(Work to the nearest million.)
Question 3
The statement of profit or loss and other comprehensive income for the year ended 31 December for Susan Trading Limited and its Statement of Financial Position as at 31 December Year 0 and Year 1 are provided below:
|
|
Year 1 |
Year 0 |
|
|
$m |
$m |
|
ASSETS |
|
|
|
Non-Current Assets |
272 |
196 |
|
Intangible Asset - Development costs |
3 |
4 |
|
|
275 |
200 |
|
|
|
|
|
Current Assets |
|
|
|
Inventories |
140 |
155 |
|
Accounts receivable |
130 |
110 |
|
Cash and cash equivalents |
102 |
23 |
|
|
372 |
288 |
|
|
|
|
|
Total assets |
647 |
488 |
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
Ordinary shares capital |
165 |
135 |
|
Retained profits |
153 |
91 |
|
|
318 |
226 |
|
|
|
|
|
Non-current liabilities |
|
|
|
Lease liability |
49 |
30 |
|
Long term loan |
31 |
60 |
|
|
80 |
90 |
2023-03-28