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hi, every one. i need your help in prepaing a cash flow statement. this problem found in Accounting theroy and practice by M.W.E Glautier and B Underdown   7th edition

balacne sheet at 31 December

                                              2000       2001     2002
                                              $000       $000     $000

Fixed assets
plant and equipment                                 13,200       16,110   16,410

Current assets
stocks                                         2,190       2,280     2,490
trade debtors                                     2,040       2,100     2,430
short-term investments                               4,200       1,800     1,290

current liabilites
short-term loans                                   (2,340)      (2,580)  (2,550)
Trade creditors                                   (2,760)      (2,610)  (2,670)
Taxation                                         (360)      (420)    (530)

net current liabilites                               5,460       5,610     5,750
net current assets                                 4,890       2,220     2,620
Total assets less current liabilites                     18,090       18,330     19,030

Capital and reserves
Called-up share capital                               4,500       4,500     4,500
Share premium account                                 9,000       9,000     9,000
Other reserves                                     3,280       4,060     4,570
Profit and loss account                               1,310         770       960

other data          
profit before tax                                   960         1,020     1,590
Tax on annual profit                                 360           420       530
Tax paid during the year                             300           360       420
Annual depreciation                                 645           780       900
Dividends declared and paid                           360           360       360

NOTES:

In 2001, equipment was sold at a loss of $210,000. New plant in 2001 cost $5,100,000 and in 2002 cost $1,200,000. profit transfered to other reserves in 2001 and 2002 amounted to $780 and $510 respectively.             
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Have you done cash flow statements before during your studies? I don’t want to simply upload an answer for you because that would defeat the learning objective.

Are you being asked to prepare a cash flow statement under FRS 1 (UK GAAP) or IAS 7 (international)?

Regards
Steve

it’s just homework and i need your help in solving this tricky question

it’s just homework and i need your help in solving this tricky question

Yes, but we’re not going to do your homework for you. We can help you, but we’re not just going to give you an answer. It wouldn’t help anyone and could be considered cheating.

Have you done cashflows before? Is there a place you’re getting stuck?

Which year are you doing the cashflow for? (because there are three columns there)

I would suggest you start by working out the “net cash flow from operating activities”.

I can’t see it being given directly, so you’re going to have to work it out indirectly. (Which IAS7 allows, but would prefer the direct method) Begin with the net operating profit for the year, and add back items that don’t represent cash outflows (depreciation is the most obvious), and adjust for changes in inventories (stocks), debtors and creditors.

Hi,

Having looked at the balance sheet which you have transcribed I would say you have to do a cashflow under FRS 1 because there is no international terminology in the balance sheet.

There is an article on here written by me on FRS 1 - Cash Flow Statements.

Have a look at the article and then let me know if you have any more concerns. 

Kind regards
Steve

thank’s every one,

my problem is “deprciation”

NOTES:

In 2001, equipment was sold at a loss of $210,000. New plant in 2001 cost $5,100,000 and in 2002 cost $1,200,000. profit transfered to other reserves in 2001 and 2002 amounted to $780 and $510 respectively.

just a loss is given but net book value and selling price of that asset is not given? how can i know the selling price of the equipment?

You also have the opening/closing positions for the p+e. I think you need to t-account the p+e to get the depreciation amount which should be the balancing figure.