Cashflows

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May 3, 2016 at 5:18 pm #313549
abrizni10
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Sir pls help me im finding it hard to understand

Scents had the following balances in its statement of finacial positions as at 30 September 2004 and 2005
Years …………………………………… 2004……..2005
Loan interest accural 5000…….. 3000
Approved ordinary dividends 20000…….. 25000
10% loan notes 100000…….. 100000
Ordinary shares capital 150000…….. 150000
8% Preference shares 50000…….. 50000

How much will appear in the statement of cash flow for the year ended 30 September 2005 for the loan interest and preference dividend paid?
May 3, 2016 at 6:29 pm #313569
John Moffat
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I am sorry but it is difficult to follow because the tabbing does not appear well on our website.

Is there no answer in the book that you are using?
May 4, 2016 at 12:41 am #313585
abrizni10
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Yes it is 16000 but it doesn’t make sense 🙁
May 4, 2016 at 7:23 am #313619
John Moffat
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The loan interest expense is 10% x 100,000 = 10,000.
Therefore the cash actually paid = 10,000 + 5,000 – 3,000 = 12,000

The preference dividend for the year is 8% x 50,000 = 4,000.

The total of the two is 16,000.
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