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cash flows from financing activities

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › cash flows from financing activities

  • This topic has 5 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • August 21, 2015 at 11:04 am #267956
    Victoria
    Participant
    • Topics: 28
    • Replies: 70
    • ☆☆

    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 2,000

    Note: 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.

    August 21, 2015 at 12:13 pm #267964
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23326
    • ☆☆☆☆☆

    Share issue proceeds 1,100
    Payments to finance lease creditors 2,200

    Does that agree with the solution?

    August 21, 2015 at 12:24 pm #267966
    Victoria
    Participant
    • Topics: 28
    • Replies: 70
    • ☆☆

    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.

    August 21, 2015 at 1:31 pm #267973
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23326
    • ☆☆☆☆☆

    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?

    August 21, 2015 at 2:41 pm #267978
    Victoria
    Participant
    • Topics: 28
    • Replies: 70
    • ☆☆

    yeah, now I see !!!
    thank you so much, I think I’ll try to employ T account in all my cash flow calculations now 🙂

    August 21, 2015 at 8:23 pm #268006
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23326
    • ☆☆☆☆☆

    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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