Cashflow statements Practice Question
Question 1
Vuyol Ltd operates a chain of restaurants. The following reports appear in their accounts for
the books.
Vuyol ltd Statement of Financial Position for the year ended 30 June
2020 2019
BWP’ 000 BWP’ 000
Non-current assets 71114 52168
Property, plant and equipment 71114 52168
Current assets 16328 13308
Inventory 10096 7744
Tarde receivables and other receivables 6232 4486
Cash and cash equivalents 0 1078
Total assets 87442 65476
Equity and liabilities
Equity 63050 47404
Share capital 20000 16000
Share premium account 6000 2000
Retained earnings 37050 29404
Non-current liabilities 16000 12000
Bank loan 16000 12000
Current liabilities 8392 6072
Trade payables 3208 3444
Tax liabilities 3190 2628
Bank overdraft 1994 0
Total liabilities 24392 18072
Total equity and liabilities 87442 65476
Additional Information
1. Net cash from operating activities for the year was BWP13 366 000 according to
Attaché’s calculations
2. The total depreciation charge in the period was BWP8 434 000.
3. Property, plant and equipment costing BWP2 074 000 with accumulated depreciation
of BWP1 462 000 was sold in the year at a profit of BWP868 000.
4. A dividend of BWP1920 000 was paid during the year.
Required:
Calculate the Net cash inflow/outflow from operation activities and confirm if the attaché’s
calculated it correctly.
Question 2
You have been asked to prepare a statement of cash flows for Gorata Ltd for the year ended
31 March 2016. A note on net cash from operating activities for the period that reconciles it
with profit from operations has been prepared. The statements of financial position of
Gorata Ltd for the past two years are set out below;
Gorata Ltd - Statement of financial position as at 31 March
2016 2015
Assets P’000 P’000
Non-current assets 35 557 26 084
Property, plant and equipment 35 557 26 084
Current assets 8 8164 6 654
Inventory 5 048 3 872
Tarde receivables and other receivables 3 116 2 243
Cash and cash equivalents - 539
Total assets 43 721 32 738
Equity and liabilities
Equity 31 525 23 702
Share capital 10 000 8 000
Share premium account 3 000 1 000
Retained earnings 18 525 14 702
Non-current liabilities 8 000 6 000
Bank loan 8 000 6 000
Current liabilities 4 196 3 036
Trade payables 1 604 1 722
Tax liabilities 1 595 1 314
Bank overdraft 997 -
Total liabilities 12 196 9 036
Total equity and liabilities 43 721 32 738
Further information:
Net cash from operating activities for the year was P6 680 000
The total depreciation charge for the year was P4 217 000.
Property, plant and equipment costing P1 037 000 with accumulated depreciation of
P731 000 was sold in the year at a profit of P434 000.
A dividend of P960 000 was paid during the year.
Required:
Prepare a statement of cash flows for Gorata Ltd for the year ended 31 March 2016.
Question 3
Moran Plc is a furniture manufacturing company. It is located in Francistown in Botswana.
The business was incorporated ten years ago. They are experiencing cashflow problems and
the board of directors have agreed to apply for a loan from Standard chartered bank. All
other financial statements have been prepared except for the cashflow statement. The
following information have been given to you by the financial controller.
Statement of comprehensive income as at 30 June 2021
BWP'000
Continuing operations
Revenue 325,692
Cost of sales (177,804)
Gross profit 147,888
Gain on the disposal of non-current assets 3,348
Distribution costs (36,468)
Administration costs (25,992)
Profit from operations 88,776
Finance costs (8,748)
Profit before tax 80,028
Tax (18,324)
Profit for the period from continuing
operations 61,704
Statement of Financial Position for 2020 and 2021
2021 2020
BWPP'00 BWPP'00
0 0
Non-current assets
Property plant and equipment 193,176 146,700
Current Assets
Inventories 108,576 82,224
Trade receivables 54,288 50,184
Cash and cash equivalents 828 0
163,692 132,408
Total Assets 356,868 279,108
Equity and liabilities
Equity
Share Capital 90,000 68,400
Share premium 14,400 0
Retained earnings 57,204 21,240
Revaluation 3,060 0
164,664 89,640
Non-current liabilities
Long term liabilities 109,368 119,664
Current Liabilities
Trade and other payables 64,512 47,160
Tax liabilities 18,324 17,712
Bank Overdraft 0 4,932
82,836 69,804
Total Liabilities 192,204 189,468
Total Equity and Liabilities 356,868 279,108
Further information:
a) A part of machinery was disposed during the year. This machinery had original cost
of BWP5,250,000 and carrying amount of BWP3,612,000.
b) The depreciation for property and plant for the year was BWP25,560,000
c) Moran Plc made an issue of ordinary shares during the accounting period on a
premium.
d) Moran Plc paid dividends of BWP 25,740,000 to its shareholders during the year.
e) The company classify short term investments as cash and cash equivalents
Required to:
Using the indirect method prepare a Statement of cash flows for Moran Plc for the year
ended 30 June 2021 according to the set standards
