Chapter 19 Revised statement of cash flows

Just a guess but is there a revaluation involved?

If I’m wrong, post again but next time give me a page number or an example number and not just the chapter number!

If I’m correct, have another shot at working it out and, if it’s still a puzzle, post again

Ah, Zita!

The value of TNCA at the start of the year was 681

Of these, we sold 109 and received 103, therefore suffering a loss of 6

We revalued some assets by 110

We bought some for 200

We know that the value at the end of the year was 832

On the debit side of the TNCA T Account there is 681, 110 and 200 adding up to 991

On the credit side of the TNCA T Account there is 109 and 832 adding up to 941

We need another 50 on the credit side to make the account balance and so far we haven’t depreciated these assets

Need I go further?

I did push you towards the “revaluation” aspect because that’s the one that is most likely overlooked ….. but you wouldn’t take the hint. Even the recorded lectures specifically highlight in upper case red letters “BEWARE THE REVALUATION ACCOUNT”

Short of sitting on your shoulder with a bull-horn leading from my mouth to your ear, I cannot give you any greater clue!

One other thing to warn you about in cash flow questions and it’s not in the video recording (I think)

Check the bottom figure “Profit after tax” in the statement of income. If that figure is NOT the difference between last year’s Retained Earnings b/f and this year’s Retained Earnings c/f according to the statement of financial position, it means that the company has paid a dividend.

The examiner will almost certainly NOT point you in the appropriate direction – nowhere in the question will he say anything at all about a dividend payment – it’s up to you to spot it!

BEWARE

You probably don’t remember him, but the politician Michael Foot was surely the classic legend