statement of cash flows — OpenTuition Forums

Ssaif02bd10y ago

scents had following balances: 2004--------------2005 loan interest accrual $5000-------- $3000 apprvd ordinary dividnd $20000--$25000 10%loan notes. $100000--$100000 ordinary share capital $150000-$150000 8%pref. share capital $50000-$50000 How much will appear in the st. of cash flow for the year ended 30sep 2005 for the ordinary dividend paid? a.$20000 b.$24000 c.$25000 d.$29000

Ssaif02bd10y ago#1

which will appear in st. of cash flows and why?please explain sir..

John MoffatTutor10y ago#2

You must have an answer in the same book in which you found the question! Do not simply set test questions here - ask about whatever problem you have with the answer and then I will try my best to help. (And, obviously, I do assume that you have watched all of our free lectures. Our lectures are a complete course for Paper F3 and cover everything you need to pass the exam well :-) )

Ssaif02bd10y ago#3

well,sir the solution says the answer is $20000.which is dividend related to 2004. but the question also mentioned approved dividend $25000 related to 2005. my concern is that,is the dividend approved for the year will paid in the next year. eg. $25000 approved in 2005 will paid in 2006??

John MoffatTutor10y ago#4

Yes. If there is a balance for approved dividend on the SOFP then it means that it has not been paid (and is showing as a current liability). So the dividend owing at the end of 2005 will be paid in 2006. The dividend actually paid in 2005 will have been the dividend that was owing at the end of 2004 (i.e. 20,000)

Ssaif02bd10y ago#5

thank you very much sir! one more question, interest on cash deposits at the bank amounted $75. in statement of cash flow is this going to effect investment income under operating activity and the interest received under investing activity? I think as this is only a bank deposits and not investment so that will only effect operating activity not investment activity. please explain sir!

John MoffatTutor10y ago#6

Interest received should appear under the heading "investing activities" and should not be included intake operating cash flows.

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