2020 Sem 1 ACC10007 Discussion Questions (And Solutions) - Topic 3
2020 Sem 1 ACC10007 Discussion Questions (And Solutions) - Topic 3
2020 Sem 1 ACC10007 Discussion Questions (And Solutions) - Topic 3
SARAWAK CAMPUS
Semester 1, 2020
Sales for 2017 were $180 000, and profit after tax was $16 350. Cost of sales was
$136 456. Dividends of $6000 were declared and paid during the year. Interest
earned and received was $2340, and interest incurred and paid was $1654. Tax
expense for the period was $3000 and this was paid in the period. Other expenses
(including depreciation) were $24 880. Property, plant and equipment were
purchased for cash.
Required
Prepare a statement of cash flows for Chartowers Ltd for 2017.
CHARTOWERS LTD
Statement of cash flows
For the year ended 31 December 2017
1
Cash from customers = opening accounts receivable + sales – closing accounts receivable
= $8 529 + $180 000 – $11 372
= $177 157
Cash paid to suppliers = opening accounts payable + purchases – closing accounts payable
2
Total paid to suppliers and employees = $146 235 + $19 904 = $166 139
Notes
The following items result in cash inflows (i.e. positive figures in SOCF):
Sales xxx
Add: Receivables at beginning xxx
Less: Receivables at end (xxx)
= Receipts from customers xxx
Purchases xxx
Add: Payables at beginning xxx
Less: Payables at end (xxx)
= Payments to suppliers xxx
Notes
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Remember:
Start the reconciliation with Profit After Tax
For all Current Assets (except Cash): Subtract “increases” and add “decreases”
Non-Current Assets,
Equity