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- January 14, 2016 at 5:55 am #294455
Question 322 from Kaplan.
The following is an extract from the financial statements of Pompeii at 31 October:
Equity & Liabilities- 2007 and 2006 (in thousands)
Share Capital: 120 and 80
Share Premium: 60 and 40
Retained earnings: 85 and 68
Total: 265 and 188
Non-current liabilities-2007 and 2006 (in thousands)
Bank Loan: 100 and 150
Total: 365 and 338What Pompeii’s net cash inflow or outflow from financing activities to include in the statement of cash flows for the year ended 31 October, 2007?
Now for financing activities we subtract loan (150,000-100,000=50,000) from issue of shares (60,000) to get 10,000 inflow correct? Now Kaplan says my answer is correct but the method that they have shown is to subtract loan (50,000) from issue of shares (60,000) and then add disposal proceeds of investments (18,000) {I do not understand where the disposals number comes from either}
I’m assuming it’s a typing error but I’d just like to confirm.
January 14, 2016 at 8:33 pm #294553I do not have the Kaplan Exam Kit, but from what you have typed it does seem as though it is a typing error.
The 10,000 inflow is correct.
The disposal proceeds of investments is not relevant, and there is not enough information to get the figure of 18,000 anyway.
January 19, 2016 at 1:21 pm #296265Yes, thank you so much 🙂
January 19, 2016 at 5:51 pm #296352You are welcome 🙂
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