CASH FLOWS FROM OPERATING ACTIVITIES

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Frederick Richard
5 years ago
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1 1 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers (calc a) Cash paid to suppliers and employees (calc b) Cash generated from / (used in) operations Dividends received Interest received Interest paid Income tax paid (close corporations) Drawings / Distributions paid Net cash generated from / (used in) operating activities Separately disclosed items

2 (Calc a) Cash received from customers Opening balance (debtors) Plus sales for the year (cash and credit) Less actual credit losses (exclude allowance adjustment) (600)* Allowance: Credit losses Debtors 600?? Allowance 300?? 900 Credit losses Balance b/d 200 Credit loss 300?? 500

3 (Calc a) Cash received from customers Opening balance (debtors) Plus sales for the year (cash and credit) Less actual credit losses (exclude allowance adjustment) (600)* Less closing balance (debtors) ( ) Cash received from debtors Plus opening balance of accrued income (rent) Less opening balance of income received in advance Plus Rent income Plus closing balance of income received in advance Less closing balance of accrued income (rent) (3 000) CASH RECEIVED FROM CUSTOMERS

4 1 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers Cash paid to suppliers and employees (calc b) Cash generated from / (used in) operations Dividends received Interest received Interest paid Income tax paid (close corporations) Drawings / Distributions paid Net cash generated from / (used in) operating activities Separately disclosed items

5 (Calc b) Cash paid to suppliers and employees Opening balance (creditors) Purchases for the year?? Less settlement discount received 0 Less closing balance (creditors) (87 650) Cash paid to creditors

6 (Calc b) Cash paid to suppliers and employees Opening balance (creditors) Purchases for the year?? Less settlement discount received 0 Less closing balance (creditors) (87 650) Cash paid to creditors (given)

7 (Calc b) Cash paid to suppliers and employees Opening balance (creditors) Purchases for the year ( )** ** Less settlement discount received 0 Less closing balance (creditors) (87 650) Cash paid to creditors (given)

8 (Calc b) Cash paid to suppliers and employees Opening balance (creditors) Purchases for the year ( )** ** Less settlement discount received 0 Less closing balance (creditors) (87 650) Cash paid to creditors (given) Plus opening balance of accrued expenses (W & E) Less opening balance of prepaid expenses (Salaries: members) (0) Plus Salaries to members Salaries Repairs & maintenance Water and electricity Telephone Plus closing balance of prepaid expenses (Salaries: members) Less closing balance of accrued expenses (W & E) (4 000) CASH PAID TO SUPPLIERS AND EMPLOYEES

9 1 CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers Cash paid to suppliers and employees ( ) Cash generated from / (used in) operations Dividends received Interest received Interest paid Income tax paid (close corporations) Drawings / Distributions paid Net cash generated from / (used in) operating activities Separately disclosed items

10 1 EX 9 Indirect method CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjusted for: Profit on sale of vehicle Depreciation Loss on sale of equipment Interest on loan to member Dividends earned Interest on loan Cash generated from operations Dividends received / distributions paid Interest received / paid Income tax paid (close corporations) Non-cash items Separately disclosed items Net cash generated from / (used in) operating activities (4 000) (3 200) (7 890) Increase in inventory ( ) (8 200) Increase in NET debtors ( )* (21 200) *{( ) ( )} Increase in accrued income (Rent)( ) (1 000) Increase in prepayments (sal: memb)( ) (4 000) Increase in creditors ( ) Increase in accrued expenses (W & E) ( ) Separately disclosed items

Name of business Statement of cash flows for the financial year end 31 December 20X1 (DIRECT METHOD) Inflow /(outflow)

Name of business Statement of cash flows for the financial year end 31 December 201 (DIRECT METHOD) Calc Notes Inflow /(outflow) CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers C1 Cash