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I have watched your lecture. but I am still confused how to calculate purchases in Cash flow when I was solving some other question
After solving many questions, I came to the conclusion that rather than finding acquisitions through Noncurrent asset account, I should only calculate it through costs of NCA and the asset which is now disposed.
Is my conclusion correct?
Thanks for helpingPlease don’t call them purchases (that normally refers to purchases of goods) – it is acquisitions of NCA’s that you are trying to calculate.
How you do it is not a cash flow problem in itself and could be asked anywhere in the exam. You will know the balances at the start and end of the year. You will have information about the depreciation and about any disposals. Acquisitions are then the missing figure.
If you have not watched, then you should watch the free lectures on depreciation (because again, although the workings may be needed for a cash flow question, it is not in itself a cash flow problem.)
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