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Far210 - July2020 SS Q5

Violet Bhd's statement of cash flows shows: 1) Net cash from operating activities was RM14,037,900, with cash generated from profits offset by cash used for inventory, receivables, interest and tax payments. 2) Net cash used in investing activities was RM14,750,700, mostly for property acquisitions offset by asset sales and investment income. 3) Net cash from financing activities was RM995,400, with cash from share issuances exceeding cash used for debt repayments and dividends. Overall, this led to a net increase in cash of RM282,600.

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105 views2 pages

Far210 - July2020 SS Q5

Violet Bhd's statement of cash flows shows: 1) Net cash from operating activities was RM14,037,900, with cash generated from profits offset by cash used for inventory, receivables, interest and tax payments. 2) Net cash used in investing activities was RM14,750,700, mostly for property acquisitions offset by asset sales and investment income. 3) Net cash from financing activities was RM995,400, with cash from share issuances exceeding cash used for debt repayments and dividends. Overall, this led to a net increase in cash of RM282,600.

Uploaded by

imn njwaaa
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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JULY 2020

QUESTION 5
a.

Violet Bhd
Statement of Cash Flows for the year ended 30 June 2020
CASH FLOW FROM OPERATING ACTIVITIES RM
Profit Before Tax (14,115,000 + 2,823,000) 16,938,000

Adjustments:
Depreciation expense 2,025,000
Interest expense 360,000
Investment Income (1,202,400)
Operating profit before working capital changes 18,120,600
Increase in Inventories (2151000)
Increase in receivables 1,344,000
Increase in payables 4500
Cash generated/(outflow) from operation 17,318,100
Interest paid (412,200)
Tax paid (2,868,000)
Net Cash Flow From Operating Activities 14,037,900

CASH FLOW FROM INVESTING ACTIVITIES


(16,516,500
Acquisition of property, plant and equipment )
Sale of long term investments 563,400
Investment income 1,202,400
Net Cash Flow From Investing Activities -14,750,700

CASH FLOW FROM FINANCING ACTIVITIES


Redemption of debentures (1,710,000)
Proceed from issue of ordinary shares 5,250,000
Dividend Paid (84,600 + 2,460,000) (2,544,600)
Net cash flow from financing activities 995,400
Net Increase/(decrease) in cash and cash equivalents 282,600
Cash and cash equivalents at the beginning of the year (b/d) 706,800
Cash and cash equivalents at the end of the year (c/d) 989,400

Beginning End of
Cash and Cash Equivalents of the year the year Changes
Cash and Bank 706800 989400 282600
706800 989400 282600

(32 √ x ½ = 16 marks)
b.
Business activities:
Operating activities
Operating activities are the principal revenue-producing activities of the entity and other
activities that are not investing or financing activities. The amount of cash flows from these
activities is a key indicator of the extent to which the entity has relied on operations to
generate cash flows to repay loans, maintain operating capacity, pay dividends and make
new investments without external sources of financing.

Investing activities are acquisition of long-term assets and other investments not included
in cash equivalents, disposal of long-term assets and other investments not included in cash
equivalents and income from investments.

Financing activities
Financing activities are activities that result in changes in the size and composition of the
equity capital and borrowings of the entity. It relates to changes in item of share capital,
debts, other borrowings, and lease liabilities.

(2 √ x any 2 activities = 4 marks)


(Total: 20 marks)

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