Cash Flow Analysis - PDF

## Classify the following activities ### Wednesday, August 20, 2014 **Classify the following into:** (i) Operating Activities (ii) Investing Activities (iii) Financing Activities, and (iv) Cash Equivalents, while preparing Cash flow Statement: 1. Cash Sales of goods-in-trade. (OA) 2. Cash Sal...

## Classify the following activities ### Wednesday, August 20, 2014 **Classify the following into:** (i) Operating Activities (ii) Investing Activities (iii) Financing Activities, and (iv) Cash Equivalents, while preparing Cash flow Statement: 1. Cash Sales of goods-in-trade. (OA) 2. Cash Sales (OA) 3. Cash received from Debtors (OA) 4. Purchase of Building (IA) 5. Sale of Building (IA) 6. Dividend paid (FA) 7. Interest paid on debentures (FA) 8. Income tax paid (OA) 9. Cash paid to Creditors/Supplier of goods (OA) 10. Commission received (OA) 11. Cash payment of long-term loans (FA) 12. Interest received on Investment (IA) 13. Office Exp (OA) 14. Finance Exp (FA) 15. Purchase of long-term Investment (IA) 16. Investment in (Marketable) short-term Securities (CCE) 17. Sale of Investment by finance Co. (OA) 18. Redemption of Debentures (FA) 19. Cash proceeds received from issuing shares at a premium. (FA) 20. Bank Balance. (CCE) ### Thursday, August 21, 2014 **Solution:** * **Operating Activities:** 1, 2, 3, 8, 9, 10, 13, 17 * **Investing Activities:** 4, 5, 12, 15 * **Financing Activities:** 6, 7, 11, 14, 18, 19 * **Cash & Cash Equivalents:** 16, 20 ### Illustration 2 State which of the following would result in "inflow" or "outflow" of cash or cash equivalents: 1. Sale of F.A book value ₹ 15,000 at a loss of ₹ 5,000 2. Declaration of final Dividend 3. Cash deposited into bank 4. Sale of Marketable Securities for Cash 5. Purchase of Marketable Securities for Cash 6. Paid ₹ 20,000 to acquire shares in Infosys Ltd. **Solution:** | **Effect on Cash or Cash Equivalents ** | **Reason** | |:---|:---| | Inflow | Cash is increased by ₹ 10,000 | | No Effect (Non Cash Activities) | Cash is not affected because the dividend will be paid in the next year. | | No Effect | Cash included bank deposits also. | | No Effect | It is merely a conversion of cash equivalents into cash. | | No Effect | It is merely a conversion of cash into cash equivalents | | Outflow | Cash is decreased. | ### Friday, August 22, 2014 Classify the following transactions into: a) Operating Activities b) Investing Activities c) Financing Activities d) Cash & Cash Equivalents. 1. Cash paid to creditors (OA) 2. Cash Receipts from Debtors (OA) 3. Cash Sales (OA) 4. Cash purchases of Goods (OA) 5. Trading Commission Received (OA) 6. Wages & Salaries paid (OA) 7. Interest Received on Debentures held as Investment (IA) 8. Interest paid on long-term borrowings (FA) 9. Brokerage paid on purchase of investments (IA) 10. Marketable Securities (CCE) 11. Refund of Income tax Received (OA) 12. Short-term Deposits (CCE) 13. Discount Allowed to customers (OA) 14. Discount Received from Suppliers (OA) 15. Office and Administration exp paid (OA) 16. Dividend Received on Shares held as Investments (IA) 17. Manufacturing overheads paid (OA) 18. Income tax paid (OA) 19. Rent Received on property held as Investment (IA) 20. Purchase of Investments (IA) 21. Redemption of preference Shares (FA) 22. Proceeds from Long term Borrowings (FA) 23. Proceeds from Sale of Machinery (IA) 24. Purchase of Goodwill (IA) 25. Proceeds from Sale of investments (IA) 26. Interim Dividend paid on Eq. Shares (FA) 27. Cash paid to suppliers of goods (OA) 28. Proceeds from Sale of Patents (IA) 29. Rent paid (OA) 30. Cash Credit (CCE) 31. B.O.D (LCE) 32. Bank Bal. (CCE) 33. Selling and distribution exp paid (OA) 34. Underwriting Commission paid (FA) 35. Dividend paid on preference Shares (FA) 36. Brokerage paid on issue of shares (FA) 37. Rent received by a concern whose main business is manufacturing (OA) 38. Rent received by Real Estate Business (OA) 39. Buy Back of Equity Shares (FA) 40. Proceeds from issue of shares (FA) 41. Purchase of machinery (IA)