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Week 5 Measuring and Reporting Cash Flows ACCY111 2013 FOR BLACKBOARD

Gives amount expected to pay during the period 78

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gives amount expected to pay during the period 78 less closing balance accounts payable (15) equals cash paid to accounts payable (creditors) 63
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Preparation of the Cash Flow Statement - a Simple Example (cont’d) Deducing cash flows from operating activities 3. Calculate interest paid relating to interest payable: Opening balance of interest payable X plus interest expense for the period X gives the amount expected to pay for the period X less closing balance of interest payable X equals the interest paid in cash X
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Preparation of the Cash Flow Statement - a Simple Example (cont’d) Refer to Example 5.1 on page 211 Deducing cash flows from operating activities 4. Calculate interest paid relating to prepaid interest: Closing balance of prepaid interest 0 plus interest expense for the period 3 gives the amount expected to pay for the period 3 less opening balance of prepaid interest (0) equals the interest paid 3
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Preparation of the Cash Flow Statement - a Simple Example (cont’d) Refer to Example 5.1 on page 211 Deducing cash flows from operating activities 4. Calculate income taxes paid: Opening balance of Income Tax Payable 4 plus Tax expense for the period 5 gives the amount expected to pay for the period 9 less Closing balance of Income Tax Payable (5) equals the income tax actually paid in cash 4
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Preparation of the Cash Flow Statement - a Simple Example (cont’d) Refer to Example 5.1 on page 211 Completing the ‘operating’ activities section 5. Complete ‘cash flows from operating activities’: Cash receipts from customers 95 Cash paid to suppliers and employees - (63 + other expenses of 17 ) (80) Interest paid (3) Income taxes paid (2008 liability) (4) Net cash provided by operating activities 8
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Preparation of the Cash Flow Statement - a Simple Example (cont’d) Refer to Example 5.1 on page 211 Deducing cash flows from investing activities: 1. Complete the cash flows from investing section: Purchase - property, plant and equipment (10 + 10 ) (20) Proceeds from sale of property, plant and equipment (0) Net cash used in investing activities (20)
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Preparation of the Cash Flow Statement - a Simple Example (cont’d) Refer to Example 5.1 on page 211 Deducing cash flows from financing activities: 1. Complete the cash flows from financing activities section: Proceeds from issue of share capital 15 Proceeds of long-term borrowings 5 Repayment of long-term borrowings (0) Dividends paid (15) Net cash provided by financing activities 5
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Preparation of the Cash Flow Statement Example 5.1 Cash flow statement for the year ended 30 June 2009 $m $m Cash flows from operating activities Cash receipts from customers 95 Cash payments to suppliers and employees (63 + other expenses of 17) (80) Interest paid (3) Income taxes paid (2008 liability) (4) Net cash provided by operating activities 8 Cash flows from investing activities Purchase of property, plant and equipment (10 + 10) (20) Net cash used in investing activities (20) Cash flows from financing activities Proceeds from issue of share capital 15 Proceeds from long-term borrowings 5 Dividends paid (15) Net cash provided by financing activities 5
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