Scribd
Upload
393 views2 pages

Additional Exercise On Cash Flows With Relative Solutions

Elida & Co reported €47,000 in income after tax for the period ending December 31, 2011. [Operating activities resulted in a net cash outflow of €20,000, with increases in accounts receivable and inventory, partially offset by depreciation/amortization and increases in payables.] Investing activities resulted in a net cash outflow of €15,000, with cash used for long-term asset and brand purchases partially offset by proceeds from asset sales. Financing activities generated €25,000 in net cash from increases in bank loans and share capital, partially offset by decreases in bonds payable. Overall, this led to a €10,000 decrease in cash during the period.

Uploaded by

pratama aditara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
393 views2 pages

Additional Exercise On Cash Flows With Relative Solutions

Elida & Co reported €47,000 in income after tax for the period ending December 31, 2011. [Operating activities resulted in a net cash outflow of €20,000, with increases in accounts receivable and inventory, partially offset by depreciation/amortization and increases in payables.] Investing activities resulted in a net cash outflow of €15,000, with cash used for long-term asset and brand purchases partially offset by proceeds from asset sales. Financing activities generated €25,000 in net cash from increases in bank loans and share capital, partially offset by decreases in bonds payable. Overall, this led to a €10,000 decrease in cash during the period.

Uploaded by

pratama aditara
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

EXERCISE 1– Cash Flow Statement

From the information given below, prepare a neat and clean Cash Flow Statement for Elida & Co.
for the period ending 31st Dec., 2011. (Using indirect method). Show very clearly the cash
generated under each of the three activities, namely: operating, investing, and financing providing
all the details.

Income Statement of Elida & Co


For the period ending 31st Dec., 2011.
Sales Revenue € 600.000
Less Cost of Goods Sold - 440.000
Gross Margin (Profit) 160.000

General and Administrative Expenses - 45.000


Selling Expenses -20.000
Depreciation - 25.000
Amortisation - 15.000
Operating income 55.000
Gain on sale of Long term assets + 17.000
Income before tax 72.000
Tax - 25.000
Income after tax 47.000

Balance Sheet as on … 1st Jan 2011. 31st Dec.2011.


Cash € 22.000 € 12.000
Account Receivables 40.000 65.000
Inventory 60.000 100.000
Prepaid Selling Expenses 5.000 20.000
Long term Investment 40.000 60.000
Long term Assets 150.000 115.000
Brand Names & Goodwill 43.000 50.000
Total: => 360.000 422.000
Account Payables 75.000 53.000
Income Tax Payable 10.000 12.000
General & Admin. Expenses Payable 10.000 20.000
Bank Loan 50.000 90.000
10% Bonds Payable 50.000 30.000
Share Capital 100.000 150.000
Retained Earnings 35.000 20.000
Net Income 30.000 47.000
Total: => 380.000 458.000

During the past year long-term assets with a net book value of € 10.000 were disposed off at a
gain of € 17.000.
Exercise 1 Solution Cash Flow statement

Income after Tax 47000

Depreciation on Buidings 25000

Amortisation on Brands 15000

Gain on a sale of buildings -17000

Increase in accout receivable -25000

Increase in inventories -40000

Decrease in account payable -22000

General & Admin. payable 10000

Prepayed Selling expense -15000

Income Tax Payable Increase +2000

CASH FLOW FROM OPERATING ACTIVITIES -20000

Outflow from a long term investiment -20000

Inflow from a sale of a long term asset 27000

Outflow from an investiment in Brand names & Godwill -22000

CASH FLOW FROM INVESTING ACTIVITIES -15000

Inflow arising from the increase of the bank loan 40000

Outflow coming from the decrease of bonds payable -20000

Inflow from increasing of share capital 50000

Ouflow from closing of income and decreasing retained


earnings -45000
CASH FLOW FROM FINANCING ACTIVITIES 25000

TOTAL CASH FLOW -10000

OK: initial amount of cash and cash equivalents: 22,000


Final amount: 12,000

You might also like