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Cash flow

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Cash flow

  • This topic has 4 replies, 3 voices, and was last updated 1 year ago by Varun.J.Thakkar.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • November 1, 2021 at 7:50 am #639621
    Varun.J.Thakkar
    Participant
    • Topics: 47
    • Replies: 50
    • ☆☆

    The following scenario relates to questions 376–380
    Extracts from Depay’s financial statements for the year ended 30 September 20X2 are shown
    below.
    Statement of profit or loss extract:     $000
    Finance costs         (60)
     
    Statement of financial position extract:
    20X2 20X1
    $000 $000

    5% loan notes 515 500
    Lease liabilities 300 310
    The following information is relevant:
    (ii) $40,000 of the finance costs relate to the loan notes which are repayable at a premium,
    making the effective rate of interest 8%. The remaining interest relates to the lease
    liabilities.
    (iv) Depay acquired $70,000 of new assets under lease agreements during the year. Depay
    makes annual payments under leases on 30 September each year.

    377 What will be recorded in Depay’s statement of cash flows under interest paid?
    A $20,000
    B $25,000
    C $45,000
    D $60,000

    Dear Sir,
    The answer to the following question is C ie 45000 (20000+ 25000)
    I understood that interest paid for loan notes will be 5% × 500000 = 25000

    Finance cost for lease liability would be 60000- 40000(8%×500000) = 20000
    But they have taken lease liability paid as 20000
    How did we conclude that the finance cost of 20000 relating to lease liability WAS PAID in the year?
    Pls help
    Thanks

    November 7, 2021 at 8:44 am #640112
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6473
    • ☆☆☆☆☆

    Hi,

    If 20,000 has been recorded as interest related to leases then this will have been paid in the year as part of the annual lease payment. The annual payment made consists of an interest element, and a capital element. The 20,000 relates to the interest paid.

    Thanks

    November 17, 2021 at 9:19 am #640852
    superwomen
    Member
    • Topics: 16
    • Replies: 20
    • ☆

    Hi, Someone can guide us how to get the “cash and cash equivalent at start of year”

    i try to get the previous year “Profit after Tax” but the answer is wrong.

    Thanks in advance.

    November 20, 2021 at 8:41 am #641128
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6473
    • ☆☆☆☆☆

    Hi,

    The cash and cash equivalents will be the cash figure net of any overdraft figure.

    Thanks

    November 21, 2021 at 9:19 am #641232
    Varun.J.Thakkar
    Participant
    • Topics: 47
    • Replies: 50
    • ☆☆

    Got it thanks sir

  • Author
    Posts
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