Anda di halaman 1dari 4

ADVANCED ACCOUNTING COURSE

CASE STUDIES PROGRAM


IAS 7 Statement of Cash Flows
(Examination of 24/1/2011)

Case 7 A : Prepare a statement of cash flows for DEBITRON Company


Extracts from the financial statements of Debitron are given below:
Income statement year ended 31 December

2008
000

2007
000

Revenue
Cost of sales

900
(450)

750
(360)

Gross profit
Other operating expenses

450
(234)

390
(218)

Profit from operations


Investment income
Finance cost
Profit on sale of property (note 1)

216
9
(75)
15

172
22
(68)
-

Profit before tax


Income tax expense

165
(49)

126
(38)

Profit for the period

116

88

Statement of changes in equity year ended 31 December


Equity at start of period
Profit for the period
Dividends paid

2008
000
324
116
(37)

2007
000
273
88
(37)

Equity at end of period

403

324

Balance sheet as at 31 December

2008
000

2007
000

ASSETS
Non-current assets
Property, plant and equipment (note 2)
Development expenditure (note 3)

360
37

420
29

Total non-current assets

397

449

Current assets:
Inventories
Trade and other receivables
Cash and cash equivalents

158
170
55

135
150
113

Total current assets

383

398

Total assets

780

847

EQUITY AND LIABILITIES


Capital and reserves
Share capital
Retained earnings

150
253

150
174

Total equity

403

324

Non-current liabilities
Interest bearing borrowings
Obligations under finance leases
Deferred tax

45
120
44

135
105
36

Total non-current liabilities

209

276

86
45
37

97
120
30

Total current liabilities

168

247

Total equity and liabilities

780

847

Current liabilities
Trade and other payables (note 4)
Short term borrowings (note 5)
Obligations under finance leases

Notes to the financial statements (all amounts in 000)


Note 1 Profit on sale of property
A large freehold property was sold by Debitron on 1 October 2008 and leased back on an
operating lease. The property was not depreciated in the current year.
Note 2 Property, plant and equipment

Freehold land and buildings


Owned plant and equipment
Leased plant and equipment

31/dec/08
0
225
135
360

31/dec/07
135
180
105
420

During the year, Debitron entered into new finance lease agreements in respect of certain items
of plant and equipment. The amounts debited to non-current assets in respect of such
agreements during the year totalled 60. No disposals of plant and equipment (owned or leased)
took place during the year. Depreciation of non-current assets for the year totalled 87.
Note 3 Development expenditure
This comprises the unamortised balance that is capitalised in accordance with the provisions of
IAS 38 Intangible Assets. Debitron charged amortisation of 15 to the income statement during
the current period in accordance with the provisions of IAS 38.
Note 4 Trade and other payables

Trade payables
Income taxes payable
Accrued interest

31/dec/08
59
15
12
86

31/dec/07
77
12
8
97

Note 5 cash and cash equivalents


In the jurisdiction in which Debitron reports, short term borrowings are regarded as part of cash
and cash equivalents.
Note 6 Acquisition
All of the shares of a subsidiary in Austria were acquired for 59. The fair value of the assets and
liabilities purchased were as follows:
Cash
Inventory
Accounts Receivable
Property, Plant etc.
Trade payables
Long-term debt

4
1
1
65
9
3

Required
Prepare the cash flow statement for 2008 using the indirect method based on the standard
template for a Statement of Cash Flows.