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Need help in SOCF indirect method

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FA – FIA FFA › Need help in SOCF indirect method

  • This topic has 5 replies, 2 voices, and was last updated 4 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • March 26, 2021 at 6:39 am #615213
    Skyvp
    Member
    • Topics: 20
    • Replies: 16
    • ☆

    i watched those free lectures about SOCF on youtube but i realized it doesnt cover everything. Because when i do my question paper, i noticed some new stuff which the free lecture didnt cover.

    One of each is capital reserve. What to do about it on SOCF?
    A portion of my question paper’s SOFP:
    capital reserve 2018 = 0, capital reserve 2019 = 50
    investment 2018 = 850, investment 2019 = 700

    Additional info: capital reserve arise from the profit of sales of investment

    My answer(could be wrong, i dont know):
    minus 50 in “cash flow from operating activities” (50 profit from disposal of investment)
    plus 200 in “cash flow from investing activities” (850-700+50 profit = 200 cash inflow)

    March 26, 2021 at 10:02 am #615222
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    The lectures do cover everything including an increase in reserves and including the purchase and sale of non-current assets.

    I do not think you can have typed out the whole question (because if you have it does not make sense). If it is a question from the BPP Revision Kit then say which question.

    The cash inflow is the cash received from the sale of the investment (which is the initial cost of the investment plus the profit on sale, but the question as you have typed it does not say what the initial cost of the investment sold was).

    The cash outflow is the cash paid for new investments which will be 150 + whatever the cost of the investment sold was.

    The question is also very strange in that the profit on the sale of an investment would not usually go to a capital reserve. This would normally only be the case if the 50 was a profit on revelation.

    March 26, 2021 at 12:31 pm #615242
    Skyvp
    Member
    • Topics: 20
    • Replies: 16
    • ☆

    Please link me to the video, i think the video im watching is not the same as yours

    March 26, 2021 at 4:00 pm #615256
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    You can find all the videos linked from this page:
    https://opentuition.com/acca/fa/acca-financial-accounting-fa-lectures/

    However it only makes sense to watch them in chapter order because they are a complete course and each lecture assumes knowledge from the previous lectures.

    March 27, 2021 at 12:00 pm #615329
    Skyvp
    Member
    • Topics: 20
    • Replies: 16
    • ☆

    i just realised i have not watch those 3 parts of SOCF which you linked me to, what i watched are from FR if im not mistaken, although i dont know whether there is a difference for SOCF between FA and FR.
    Thanks anyway Sir

    March 28, 2021 at 12:37 pm #615365
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54674
    • ☆☆☆☆☆

    The basic statement is no different, but FR is more advanced than FA.

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Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘Need help in SOCF indirect method’ is closed to new replies.

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