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John Moffat.
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lokeshdh00
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Question – What is net cash Flow from investing activities?
Interest Accrual B/F – 4,900
Interest Accrual C/F – 1200
Interest payable – 20,000
Interest Received – 13,000
Proceeds from share issue – 120,000
Loan repaid – 140,000
Dividends (Statement of changes in equity) – 600,000My doubt – 1) What is the use of Accrual bf and cf in any Cashflow activity, I know it’s irrelevant in operating activity as Interest payable is already given. I dont know if Intrest a/c will be made to calculate a particular amount just like non current asset purchased in Example 1 in Opentution lectures.
2)Here dividend is given in statement of changes in equity which means it’s Dividend paid. If we receive dividend will it appear just in p&l account as it’s a profit / Income or will appear somewhere else too
John Moffat
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1. The interest expense for the year is added back to the profit in order to get the cash flow from operating activities. The interest actually paid is then show separately as a payment of cash. The brought forward and carry forward accruals explain the difference between the interest expense and the interest paid.
2. In the accounts, dividends received are debited to cash and recorded as income in the SOPL.
In the Statement of Cash Flows, they are not included in the cash flow from operating activities but appear as cash flows from investing activities.
lokeshdh00
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