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consolidated cash flow statement question

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › consolidated cash flow statement question

  • This topic has 9 replies, 3 voices, and was last updated 11 years ago by MikeLittle.
Viewing 10 posts - 1 through 10 (of 10 total)
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  • October 15, 2013 at 12:03 pm #142804
    clamy
    Participant
    • Topics: 6
    • Replies: 2
    • ☆

    Hi, I have some doubts on the answer of a consolidated cash flow statement on BPP textbook question bank(question 21 Porter). The question gives two years “Trade and other payables” figures of statment of financial position. $ 110 on 20X6 and $ 98 on 20X5. It goes on with additional information relates to the consolidated financial statements. Included in ‘trade and other payables’ is the $ equivalent of an invoice for 102m shillings for some equipment purchased from a foreign supplier. The asset was invoiced on 5 March 20X6, but had not been paid for at the year end, 31 May 20X6. Exchange gains or losses on the transaction have been included in administrative expenses. Relevant exchange rates were as follows:
    Shillings to $1
    5 March 20X6 6.8
    31 May 20X6 6.0

    The answer gives explantion as follows:
    Decrease in trade payables (110 – 98 – 12 – 17 )

    But I think the $17 should be already included in the year-end figure “$110” and the answer should be increase in trade payables (110 – 98 – 12). But this causes non-reconcile “Cash and cash equivalents at the end of the year” figure in the final cash flow statement with “Cash and cash equivalents” number in STATEMENT OF FINANCIAL POSITION.

    Could anyone show me what’s wrong with my answer? Thanks.

    October 15, 2013 at 12:42 pm #142810
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23323
    • ☆☆☆☆☆

    First – what’s the $12?

    Second – the $17 IS INCLUDED within the £110. But this is not a TRADE payable and is therefore deducted from the $110.

    That reduces $110 down to $93 and gives us a decrease in trade payables ….. but I still don’t know what the $12 is

    October 16, 2013 at 2:05 am #142861
    clamy
    Participant
    • Topics: 6
    • Replies: 2
    • ☆

    Thanks, sir. Big fan of your lecture. The $12 is related to another part of the question which I didn’t mention. Sorry for the confusion and thanks again for your prompt reply to my question ^ ^

    October 16, 2013 at 6:28 am #142865
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23323
    • ☆☆☆☆☆

    You’re welcome 🙂

    December 9, 2013 at 5:16 pm #151846
    accaurate stewdent
    Member
    • Topics: 3
    • Replies: 15
    • ☆

    I also suspect the answer may not be entirely correct, for not the reasons above.
    The treatment of the revalution surplus moves from $54m to $101m, thus $47m movement
    We’re told that the property revaluation in OCI is $58m, so $58m OCl (taken to OCI possibly for reversing earlier reval losses? + $47m gain to reserves = $105m to PPE
    but instead, if the $58m appears to be booked between ppe & OCI – no movement to surplus reval reserve – so I am puzzled I can’t reconcile the movement in the reval surplus reserve.
    So, per the model answer, reval surplus = $54m + $58m = $112m … But the closing balance is $101m ??? what might I be missunderstanding ?

    December 9, 2013 at 5:21 pm #151851
    accaurate stewdent
    Member
    • Topics: 3
    • Replies: 15
    • ☆

    i.e. was expecting;
    Dr PPE $105m
    Cr OCI Reval Gain $ 58m
    Cr Surplus Reserve $ 47m

    + Possibly Dep’n adjmts for past reval reversal..

    December 9, 2013 at 5:56 pm #151874
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23323
    • ☆☆☆☆☆

    That difference between $112 and $101 looks like a transfer from Revaluation Reserve to Retained Earnings to compensate the Retained Earnings for the surplus / excess depreciation on the revaluation surplus

    (Where on this Earth, have you found a copy of Porter? I’ve looked in my BPP 2011 revision kit and in my 2013 Kaplan revision kit and neither has Porter!)

    As you may gather from my response, I don’t have access to the question Porter. If my reply has not helped sufficiently, you’ll need to post again in greater detail

    Sorry!

    December 9, 2013 at 7:35 pm #151898
    accaurate stewdent
    Member
    • Topics: 3
    • Replies: 15
    • ☆

    Question is within BPP 2013 Study Text; Q.21 on page 554, Model Answer per page 603

    December 9, 2013 at 7:38 pm #151901
    accaurate stewdent
    Member
    • Topics: 3
    • Replies: 15
    • ☆

    I thought of the transfer across reserves but, the question is explicit in detailing the elemental movements for the year on retained earnings in paragraph 5 being TCI + Divs paid., so I ruled that out,

    December 10, 2013 at 8:28 am #152090
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23323
    • ☆☆☆☆☆

    Paul, I’m so sorry, I cannot help you. I do not have a BPP text book available and it’s probably too late now – the exam in this part of the World starts in 33 minutes!

    Again, sorry 🙁

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