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and this…
Delta’s SFP:
December 31, 2008 December 31, 2007
Share capital 2,000 1,200
Share premium 400 100
Finance lease liabilities (long-term portion) 3,000 4,000
Finance lease liabilities (short-term portion) 1,800 2,000Note: During the year Delta has entered into a new finance lease agreement and recorded fixed assets worth of 1,000.
Required: Prepare a fragment of a statement of cash flows from financing activities.
Share issue proceeds 1,100
Payments to finance lease creditors 2,200Does that agree with the solution?
there’s no solution for these questions, I’m afraid. I can see now how you arrived at 1,100, but why 2,200? we paid only 1,200 (1,000+200) on lease liabilities, I believe.
Put both brought forward liabilities into the credit side of a single T account (4,000 and 2,000)
Put both carry forward liabilities into the debit side of the same T account (3,000 and 1,800)
Put into the credit side of that same T account the 1,000 new finance lease liability
That gives us credits of 7,000 and debits of 4,800 – a missing figure on e debit side of 2,200
That entry MUST have been Dr Finance Lease Liabilities 2,200 Cr Cash 2,200
Ok?
yeah, now I see !!!
thank you so much, I think I’ll try to employ T account in all my cash flow calculations now 🙂That’s a good idea. Last time I taught in your area (Uzbekistan) I remember telling the students that really the only time I found T accounts of immense value was in Cash Flow questions.
It is possible to do without – of course it is – but if there’s any tiny element of doubt, then open a T account
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