By admin4th November 2019 Welcome to your FR Statement of Cash flows 1. [ IAS 7 ]Which two of the following would be recognised as cashflows from operating activities? Interest received Tax paid Interest paid Repayment of loans Purchase of non current assets Dividends received 2. [ IAS 7 ]Which one of the following would be recognised as cash outflows in accordance with IAS 7? Interest received Dividends received Dividends paid Proceeds from disposal of non current assets Purchase of non current assets Proceeds from issue of loans 3. [ IAS 7 ]Which three of the following would be classified under ‘cash flows from operating activities’ in line with IAS 7? Loss on disposal of a non current asset Interest received Dividends received Interest paid Tax paid Dividends paid 4. [ IAS 7 ]Which three of the following would be classified under financing activities in line with IAS 7? Dividends paid Dividends received Proceeds from issues of preference shares Interest paid Interest received Redemption of long term borrowing 5. [ IAS 7 ]Accrued interest payable b/f was £48,000.During the year interest payable of £164,000 was charged to the SoPL. If the accrued interest balance c/f at the end of the year was £145,000. How much interest paid should be shown on the cash flow? 6. [ IAS 7 ]Which two of the following would be recognised as cash outflows from financing activities – IAS 7? Dividens paid Repayment of loans Proceeds from share issues Proceeds from issues of loans or debentures Proceeds from disposal of non current assets Dividens received 7. [ IAS 7 ]Which three of the following would be listed under cashflows from investing activities? IAS 7 Proceeds from issues of shares Profit on disposal of non current asset Depreciation Proceeds from sales of non curent asset Purchase of non current asset Dividens received 8. [ IAS 7 ]Which three of the following would appear in cash flows from operating activities using the DIRECT method? IAS 7 Cash receipts from customers Cash receipt from sale of non current asset Cash paid for expenses Cash paid to suppliers Cash paid for investment in non current assets Depreciation 9. [ IAS 7 ]IAS 7 Statement of cash flows sets out the three main headings to be used in a statement of cash flows. Items that may appear on a statement of cash flows include:i) Tax paidii) Purchase of investmentsiii) Loss on disposal of machineryiv) Purchase of equipmentWhich of the above items would be included under the heading “Cash flows from operating activities” according to IAS 7? (i) and (ii) (i) and (iii) (ii) and (iv) (iii) and (iv) 10. [ IAS 7 ]The following is an extract from the statement of cash flows for QW for the year ended 31 December 20X1: $mCash flows from operating activities 950Cash flows from investing activities (1,130)Cash flows from financing activities 120 –––––Net cash flow for the year (60)Cash and cash equivalents at start of year 650 –––––Cash and cash equivalents at end of year 590 –––––Based on the information provided, which one of the following independent statements would be a reasonable conclusion about the financial adaptability of QW for the year to 31 December 20X1? QW is in decline as there is a significant cash outflow in investing activities. QW has financed a high proportion of its investing activities by utilising its operating cash. QW must have made a profit in the year, as it has a net cash inflow from operating activities. QW must be facing serious liquidity problems as its cash and cash equivalents have fallen by $60 million throughout the year. 11. [ Ratios ]KL operates in the fashion wholesale business and its management team has become increasingly concerned about the liquidity of the entity. It has asked you for your opinion and you have calculated the following ratios to help you with your assessment: 30 June 20X3 30 June 20X2Inventory holding period 128 days 77 daysReceivables collection period 88 days 87 daysPayables payment period 170 days 118 daysCurrent ratio 1.3:1 2.1:1 Quick ratio 0.7:1 1.4:1Which one of the following is NOT a valid statement about the ratios shown above? The increase in inventory holding period is a significant concern as there is a high risk of obsolescence in the industry. The deterioration in the ratios shown at the 30 June 20X3 year‐end could simply be a result of a significant purchase of goods being made on credit terms close to the year‐end. KL are attempting to finance their increased inventory holding period by delaying payments to suppliers. The significant increase in payables payment period will have caused the cash position to worsen dramatically. 12. [ IAS 7 ]Cash generated from operations in the statement of cash flow is considerably lower thanthe profit from operations recorded in the statement of profit or loss.Which of the following could be possible reasons for this?(i) A non‐current asset has been sold during the year at a large profit(ii) A large payable was paid off just before year end(iii) A large sale was made just before year end, resulting in many lines being out of stock at the year‐end date(iv) Purchase of new premises during the year has led to an increase in the depreciation charge All of them (ii) and (iii) (i) and (iii) (i) and (ii)
