• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Congratulations to Jamil from Pakistan and Jeeva from Malaysia - Global Prize winners!
see all ACCA December 2022 Genius Hunt Competition winners >>

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Dividends paid

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Dividends paid

  • This topic has 2 replies, 2 voices, and was last updated 8 months ago by alawi sayed.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • May 17, 2022 at 7:38 pm #655920
    alawi sayed
    Participant
    • Topics: 153
    • Replies: 167
    • ☆☆☆

    Hello Sir,

    For the below Q

    Why in their solution for the net cash generated or used in operating activities they deducted the dividens paid.As per my knowledge dividends paid will be deducted from cash generating from financing activities .

    Thanks,

    ———————-
    Q
    The following scenario relates to question 21 – 25
    Grace Co is in process of creating its statement of cash flows for the year ended 31
    December 2017. The relevant income statement and statement of financial position
    are as follows:
    Income Statement for the Year Ended 31 December 2017
    $’000
    Sales 810
    Cost of goods sold (140)
    Gross profit 670
    Depreciation (90)
    Admin expenses (20)
    Loss on disposal of non-current asset (20)
    Operating profit 540
    Interest paid (30)
    Taxation (160)
    Net profit 350
    Statement of Financial Position as at 31 December
    2017 2016
    $’000 $’000
    Non-current assets
    Cost 1,460 1,400
    Depreciation 250 200
    1,210 1,200
    Current assets
    Inventory 45 35
    Trade receivables 60 65
    Cash and bank 25 20
    130 120
    Total assets 1,340 1,320
    Equity and liabilities
    Share capital 310 300
    Share premium 125 120
    Retained earnings 695 400
    1,130 820
    Loan 90 380
    Trade payables 40 70
    Taxation 80 50
    1,340 1,320

    Additional Information:
    Dividends of $55,000 were paid during the year. The company purchased a new
    noncurrent asset of $100,000 in cash during the year.

    22. What is the net cash generated from (or used in) operating activities?
    A) $400,000
    B) $215,000
    C) ($400,000)
    D) ($215,000)

    ————–
    Answer
    22. A
    Cash generated from operations $615,000
    Interest paid ($30,000)
    Dividends paid ($55,000)
    Tax paid (50 + 160 – 80) (130,000)
    Net cash from operating activities $400,000

    May 20, 2022 at 11:18 am #656072
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6473
    • ☆☆☆☆☆

    Hi,

    A business has the option to include them in operating activities but must be consistent in doing so each year. A question like this in the exam would need to clearly state where the dividends paid appear in their statement of cash flow.

    Thanks

    May 21, 2022 at 11:51 am #656128
    alawi sayed
    Participant
    • Topics: 153
    • Replies: 167
    • ☆☆☆

    So Normanlly dividends paid be included in the financing activities.

    Thanks Sir.

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis
  • baraka42 on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy