How often Statement of cash flows is asked

Where it was asked

• May/Jun 201420 marks
• Oct/Nov 201324 marks
• May/Jun 201320 marks

The questions

1. May/Jun 2014, Q4(a)16 marks

   Jukskei Computers CC provides the following financial information. Accounts relating to the statement of financial position, comparing 31 December 2013 with 31 December 2012, are as follows: member's contribution – Christa R230 000 (2013) versus R180 000 (2012); member's contribution – Lizaan R170 000 versus R120 000; retained earnings R310 025 versus R250 000; long-term loan R80 000 versus R65 000; creditors control (trade creditors) R42 500 versus R35 000; accrued interest expense R4 000 versus nil; bank overdraft (Cr) nil versus R300; land and buildings at cost R540 000 versus R450 000; vehicles at cost R190 000 versus R95 000; furniture at cost R50 000 versus R48 000; investments at cost nil versus R70 000; accumulated depreciation on vehicles R40 000 versus R32 000; accumulated depreciation on furniture R10 000 versus R8 800; bank (Dr) R45 000 versus nil; debtors control (trade debtors) R42 500 versus R52 500; prepaid expenses (wages) R5 000 versus R3 600; inventory R74 025 versus R52 000; distribution to members payable R30 000 versus R10 000; and income tax payable R30 000 versus R70 000. The statement of profit or loss and other comprehensive income for the year ended 31 December 2013 discloses revenue of R950 000; cost of sales of R500 000; a profit on the sale of a non-current asset (furniture) of R5 000; dividend income of R525 from financial assets at fair value through profit or loss (held for trading: listed investments); marketing expenses of R100 000; administrative expenses (including salaries and wages) of R115 000; depreciation of R72 500; a loss on the sale of a non-current asset (vehicle) of R500; interest expense of R8 000; profit before tax of R159 525; and income tax expense of R45 900. Additional information: on 20 December 2013 a total profit distribution of R26 800 was recorded as due to the members; on 21 December 2013 a portion of this was paid in cash to each member, with the remaining amounts to be paid on 2 January 2014. On 31 October 2013 a vehicle with a cost price of R60 000 and accumulated depreciation of R50 000 (stated as at 1 January 2014) was sold for cash. The accounting policy of Jukskei Computers CC is to provide for depreciation on vehicles according to the diminishing balance method at 10% per annum, and on furniture according to the straight-line method at 25% per annum. Answers must comply with International Financial Reporting Standards (IFRS) appropriate to a close corporation; comparative figures and notes to the statement of cash flows are not required, and all calculations must be shown. Using the indirect method, prepare the cash flows from operating activities section of the statement of cash flows of Jukskei Computers CC for the year ended 31 December 2013.

2. May/Jun 2014, Q4(b)4 marks

   Jukskei Computers CC provides the following financial information. Accounts relating to the statement of financial position, comparing 31 December 2013 with 31 December 2012, are as follows: member's contribution – Christa R230 000 (2013) versus R180 000 (2012); member's contribution – Lizaan R170 000 versus R120 000; retained earnings R310 025 versus R250 000; long-term loan R80 000 versus R65 000; creditors control (trade creditors) R42 500 versus R35 000; accrued interest expense R4 000 versus nil; bank overdraft (Cr) nil versus R300; land and buildings at cost R540 000 versus R450 000; vehicles at cost R190 000 versus R95 000; furniture at cost R50 000 versus R48 000; investments at cost nil versus R70 000; accumulated depreciation on vehicles R40 000 versus R32 000; accumulated depreciation on furniture R10 000 versus R8 800; bank (Dr) R45 000 versus nil; debtors control (trade debtors) R42 500 versus R52 500; prepaid expenses (wages) R5 000 versus R3 600; inventory R74 025 versus R52 000; distribution to members payable R30 000 versus R10 000; and income tax payable R30 000 versus R70 000. The statement of profit or loss and other comprehensive income for the year ended 31 December 2013 discloses revenue of R950 000; cost of sales of R500 000; a profit on the sale of a non-current asset (furniture) of R5 000; dividend income of R525 from financial assets at fair value through profit or loss (held for trading: listed investments); marketing expenses of R100 000; administrative expenses (including salaries and wages) of R115 000; depreciation of R72 500; a loss on the sale of a non-current asset (vehicle) of R500; interest expense of R8 000; profit before tax of R159 525; and income tax expense of R45 900. Additional information: on 20 December 2013 a total profit distribution of R26 800 was recorded as due to the members; on 21 December 2013 a portion of this was paid in cash to each member, with the remaining amounts to be paid on 2 January 2014. On 31 October 2013 a vehicle with a cost price of R60 000 and accumulated depreciation of R50 000 (stated as at 1 January 2014) was sold for cash. The accounting policy of Jukskei Computers CC is to provide for depreciation on vehicles according to the diminishing balance method at 10% per annum, and on furniture according to the straight-line method at 25% per annum. Answers must comply with International Financial Reporting Standards (IFRS) appropriate to a close corporation; comparative figures and notes to the statement of cash flows are not required, and all calculations must be shown. Calculate the amount that must be disclosed as proceeds from the sale of the vehicle under the cash flows from investing activities section of the statement of cash flows of Jukskei Computers CC for the year ended 31 December 2013.

3. Oct/Nov 2013, Q424 marks

   MontshoBlue Traders is a partnership. From the statement of financial position, the following balances applied at 28 February 2013 and 28 February 2012 respectively: capital account Montsho R330 000 and R290 700; capital account Blue R330 000 and R290 700; current account Montsho R57 900 credit and R75 600 credit; current account Blue R2 460 credit and R600 debit; land and buildings at cost R435 000 and R615 000; furniture and equipment at cost R31 200 and R21 000; accumulated depreciation on furniture and equipment R4 800 and R3 000; inventory R144 000 and R150 600; bank R100 860 debit and R15 000 credit; debtors control R210 900 and R111 000; long-term loan (Bantu Bank) R87 000 and R78 000; creditors control (trade creditors) R168 600 and R145 800; accrued income (rent receivable) R600 and R1 200; accrued expenses (salaries and wages) R1 800 and R600; and a fixed deposit of R60 000 in 2013 (none in 2012). From the statement of profit or loss and other comprehensive income for the year ended 28 February 2013: revenue R750 900; cost of sales R294 540; rental income R7 200; profit on sale of non-current asset (land and buildings) R15 000; administrative expenses (including salaries and wages) R105 000; depreciation R1 800; and interest expense R9 000. Additional information: the fixed deposit was made on 28 February 2013; the R75 000 loan was acquired on 1 November 2011, bears interest at 12% per annum, and this interest is capitalised; no land and buildings were purchased during the year, and fifty percent of the selling price of the land and buildings sold was received in cash with the remainder on credit; no furniture or equipment was sold or scrapped during the year, and all purchases of furniture and equipment were paid in cash; all inventory purchases were made on credit, and all expenses other than the accrued expenses were paid in full; the drawings balances at 28 February 2013 for Montsho and Blue amounted to R201 600 and R175 800 respectively, relating to salaries paid to the partners during the year; inventory is disclosed at cost; the debtors control balance at 28 February 2012 comprised trade debtors only, while the debtors control balance at 28 February 2013 includes trade debtors as well as a debtor in respect of the sale of land and buildings; and all capital contributions were made in cash. For MontshoBlue Traders, prepare the cash flows from operating activities and cash flows from financing activities sections of the statement of cash flows for the year ended 28 February 2013. The answer must comply with International Financial Reporting Standards (IFRS) as appropriate to the business of the partnership, and the cash generated from/(used in) operations must be disclosed using the indirect method. Comparative figures are not required, but all calculations must be shown.

4. May/Jun 2013, Q420 marks

   Monaco Traders is the entity under review. The statement of financial position balances as at 31 December 2011, with 2010 comparatives, were: land and buildings at cost R1 147 500 (2010: R567 905); machinery at carrying amount R482 145 (2010: R600 030); investments – fixed deposit R100 000 (2010: R62 000); loans to partners R52 500 (2010: R74 250); drawings accounts R77 000 (2010: R38 000); inventory R51 390 (2010: R30 480); debtors control R94 704 (2010: R93 750); prepaid water and electricity R0 (2010: R15 600); accrued rental income R10 200 (2010: R0); bank (debit) R182 761 (2010: R405 000); capital accounts R1 249 500 (2010: R1 131 635); current accounts R254 730 (2010: R290 800); revaluation surplus on land and buildings R40 000 (2010: R0); long-term loan R249 750 (2010: R201 000); current portion of long-term loan R27 750 (2010: R0); loan from partner R168 000 (2010: R150 000); allowance for credit losses R5 550 (2010: R4 500); accrued interest expense R6 600 (2010: R0); and creditors control R196 320 (2010: R109 080). The extract from the statement of profit or loss and other comprehensive income for the year ended 31 December 2011 showed cost of sales R420 750, gross profit R478 890, rental income R20 400, investment income (interest income) R15 300, interest expense R30 750, distribution expenses R226 804, credit losses R8 550, administrative and other expenses (including water and electricity) R155 521, and depreciation R91 035. Additional information: all inventory is purchased and sold on credit; cash paid to creditors for purchases was correctly calculated as R354 420; during the year improvements were made to the buildings, all paid in cash and capitalised, and the land and buildings were revalued on 30 December 2011 by Mr Mbujo, an independent sworn appraiser; on 31 May 2011 machinery was sold at carrying amount for cash; and the loan from the partner was acquired on 31 December 2010, bears interest at 12% per annum which is capitalised, and is repayable on 31 December 2016. Prepare the statement of cash flows of Monaco Traders for the year ended 31 December 2011. The answer must comply with the requirements of International Financial Reporting Standards, and the cash generated from or used in operations must be disclosed according to the direct method. All calculations must be shown, and comparative figures are not required.