Cash Flow Statement: Problems with Solution

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales revenue

1600000

:- Decrease in debtors

100000

1700000

b. Cash paid to suppliers

:- Cost of goods sold

(1100000)

:- Increase in Inventories

(100000)

:- Decrease in Bills payable

(20000)

:- Increase in creditors

100000

 (1120000)

c. Cash paid to employees

:- Operating expenses

(180000)

(180000)

e. Interest paid

:- Interest on debenture

(20000)

(20000)

Cash from operating expenses

380000

Cash flow from investing activities

:- Purchase of machinery

(600000)

:- Sales of machinery

60000

Cash from investing activities

(540000)

Cash flow from financial activities

:- Issue of share capital with premium

(200000 + 20000)

220000

:- Redemption of 10% debenture

(100000)

:- Dividend paid

(60000)

Cash from financial activities

60000

The net change in cash and cash equivalent

(100000)

Add: Opening cash and cash equivalent

200000

Closing cash and cash equivalent

100000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales revenue

1200000

:- Increase in debtors

(30000)

1170000

b. Cash paid to suppliers

:- Cost of goods sold

(725000)

:- Increase in stock

(25000)

:- Increase in creditors

30000

(720000)

c. Cash paid to employees

:- Operating expenses

(300000)

:- Increase in salaries outstanding

10000

(290000)

d. Tax paid

:- Tax paid

(15000)

(15000)

Cash from operating expenses

145000

Cash flow from investing activities

:- Purchase of Equipment

(104000)

:- Sales of furniture

100000

Cash from investing activities

(4000)

Cash flow from financial activities

:- Issue of share capital

150000

Cash from financial activities

150000

The net change in cash and cash equivalent

291000

Add: Opening cash and cash equivalent

75000

Closing cash and cash equivalent

366000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales revenue

800000

:- Decrease in debtors

30000

830000

b. Cash paid to suppliers

:- Cost of goods sold

(500000)

:- Increase in Inventory

(20000)

:- Increase in creditors

25000

(495000)

c. Cash paid to employees

:- Administrative expenses

(160000)

:- Decrease in Outstanding Expenses

(5000)

(165000)

e. Interest paid

:- Interest on debenture

(15000)

(15000)

d. Tax paid

:- Increase in provision for tax

10000

10000

Cash from operating expenses

165000

Cash flow from investing activities

:- Purchase of office equipment

(250000)

:- Sales of office equipment

55000

:- Purchase of investment

(50000)

Cash from investing activities

(245000)

Cash flow from financial activities

:- Issue of share capital with premium (200000 + 50000)

250000

:- Redemption of 10% debenture

(50000)

:- Dividend paid

(70000)

Cash from financial activities

130000

The net change in cash and cash equivalent

45000

Add: Opening cash and cash equivalent

250000

Closing cash and cash equivalent

295000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales income

2400000

:- Decrease in debtors

200000

2600000

b. Cash paid to suppliers

:- Cost of goods sold

(1400000)

:- Increase in inventories

(200000)

:- Increase in creditors

200000

(1400000)

c. Cash paid to employees

:- Operating expenses

(400000)

:- Decrease in outstanding Expenses

(40000)

(440000)

Cash from operating expenses

760000

Cash flow from investing activities

:- Purchase of office fixed assets

(1200000)

:- Sales of fixed assets

120000

Cash from investing activities

(1080000)

Cash flow from financial activities

:- Issue of share capital with premium (400000 + 40000)

440000

:- Redemption of 8% debenture with premium (200000 +40000)

(240000)

:- Dividend paid

(80000)

Cash from financial activities

120000

The net change in cash and cash equivalent

(200000)

Add: Opening cash and cash equivalent

400000

Closing cash and cash equivalent

200000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales revenue

2000000

:- Decrease in debtors

5000

205000

b. Cash paid to suppliers

:- Cost of goods sold

(110000)

:- Increase in stock

(5000)

:- Increase in bills payable

5000

:- Increase in creditors

10000

(100000)

c. Cash paid to employees

:- Administrative expenses

(30000)

(30000)

Cash from operating expenses

75000

Cash flow from investing activities

:- Purchase of plant

(75000)

:- Sales of plant

3000

:- Decrease investment

20000

Cash from investing activities

(52000)

Cash flow from financial activities

:- Issue of share capital

25000

:- Redemption of 10% debenture

(10000)

:- Dividend paid

(10000)

Cash from financial activities

5000

The net change in cash and cash equivalent

28000

Add: Opening cash and cash equivalent

10000

Closing cash and cash equivalent

38000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales revenue

380000

:- Decrease in debtors

36500

416500

b. Cash paid to suppliers

:- Cost of goods sold

(190000)

:- Increase in stock

(37500)

:- Increase in creditors

31500

(196000)

c. Cash paid to employees

:- Administrative expenses

(75000)

:- Decrease in wages outstanding

(1500)

:- Decrease in prepaid insurance

1000

(75500)

Cash from operating expenses

145000

Cash flow from investing activities

:- Purchase of machinery  

(230000)

:- Sales of furniture

17500

Cash from investing activities

(212500)

Cash flow from financial activities

:- Issue of share capital (75000 + 7500)

82500

:- Redemption of Loan

(37500)

:- Dividend paid

(15000)

Cash from financial activities

30000

The net change in cash and cash equivalent

(37500)

Add: Opening cash and cash equivalent

75000

Closing cash and cash equivalent

375000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales revenue

1000000

:- Decrease in bills receivable

10000

:- Decrease in debtors

40000

1050000

b. Cash paid to suppliers

:- Cost of goods sold

(750000)

:- Increase in Closing stock

(50000)

:- Increase in creditors

40000

(760000)

c. Cash paid to employees

:- Operating expenses

(120000)

(120000)

Cash from operating expenses

170000

Cash flow from investing activities

:- Purchase of fixed assets

(300000)

:- Sales of fixed assets

40000

Cash from investing activities

(260000)

Cash flow from financial activities

:- Issue of share capital with premium (100000 + 10000)

110000

:- Redemption of 15% debenture

(50000)

:- Dividend paid

(20000)

Cash from financial activities

40000

The net change in cash and cash equivalent

(50000)

Add: Opening cash and cash equivalent

100000

Closing cash and cash equivalent

50000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales income

1050000

:- Decrease in debtors

60000

1110000

b. Cash paid to suppliers

:- Cost of goods sold

(660000)

:- Increase in inventories

(60000)

:- Increase in creditors

50000

(670000)

c. Cash paid to employees

:- Administrative expenses

(150000)

:- Increase in outstanding expenses

25000

(125000)

Cash from operating expenses

315000

Cash flow from investing activities

:- Purchase of fixed assets

(480000)

:- Sales of fixed assets

105000

Cash from investing activities

(375000)

Cash flow from financial activities

:- Issue of share capital

150000

:- Redemption of 8% debenture

(75000)

:- Dividend paid

(90000)

Cash from financial activities

(15000)

The net change in cash and cash equivalent

(75000)

Add: Opening cash and cash equivalent

150000

Closing cash and cash equivalent

75000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales

3000000

:- Decrease in Sundry debtors

10000

310000

b. Cash paid to suppliers

:- Cost of goods sold

(225000)

:- Increase in inventories

(20000)

:- Increase in sundry creditors

20000

:-  Increase in bills payable

15000

(210000)

c. Cash paid to employees

:- Operating expenses

(80000)

(80000)

Cash from operating expenses

20000

Cash flow from investing activities

:- Purchase of machinery

(150000)

:- Sales of machinery

20000

:- Decrease in investment

20000

Cash from investing activities

(110000)

Cash flow from financial activities

:- Issue of share capital

150000

:- Dividend paid

(20000)

Cash from financial activities

130000

The net change in cash and cash equivalent

40000

Add: Opening cash and cash equivalent

20000

Closing cash and cash equivalent

60000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales

700000

:- Decrease in debtors

40000

740000

b. Cash paid to suppliers

:- Cost of goods sold

(440000)

:- Increase in stock

(40000)

:- Increase in creditors

50000

(430000)

c. Cash paid to employees

:- Operating expenses

(100000)

(100000)

Cash from operating expenses

210000

Cash flow from investing activities

:- Purchase of fixed assets

(320000)

:- Sales of office equipment

70000

Cash from investing activities

(250000)

Cash flow from financial activities

:- Issue of share capital

100000

:- Redemption of Bank Loan

(50000)

:- Dividend paid

(60000)

Cash from financial activities

(10000)

The net change in cash and cash equivalent

(50000)

Add: Opening cash and cash equivalent

100000

Closing cash and cash equivalent

50000

Particular

Amt.

Amt.

Cash flow from operating activities:

a. Cash Collection from customers:

:- Sales revenue

1600000

:- Increase in debtors

(40000)

1560000

b. Cash paid to suppliers

:- Cost of goods sold

(1120000)

:- Decrease in inventory

30000

:- Decrease in creditors

(30000)

(1120000)

c. Cash paid to an employee

:- Operating expenses

(276000)

:- Increase in outstanding expenses

4000

:- Decrease in prepaid insurance

4000

(268000)

d. Tax paid

:- Tax paid

(40000)

:- Increase in provision for tax

60000

20000

e. Miscellaneous

:- Decrease in Overdraft

(20000)

Cash from operating expenses

112000

Cash flow from investing activities

:- Purchase of fixed assets

(312000)

:- Sales of fixed assets

72000

Cash from investing activities

(240000)

Cash flow from financial activities

:- Issue of share capital (80000 + 10000)

90000

:- Redemption of 10% debenture

80000

:- Dividend paid

(32000)

Cash from financial activities

138000

The net change in cash and cash equivalent

10000

Add: Opening cash and cash equivalent

40000

Closing cash and cash equivalent

50000