Interpacific Limited Cash-flow Statement for the year Ended 30th June 2014 Essay Example

INTERPACIFIC LIMITED

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30TH JUNE 2014

Cash flow from operating activities

Sales 26,576,000

Decrease in account receivable 120,098

Cash collection 26,696,098

Adjustments

Cost of goods sold 6,543,209

Increase in inventories 110,683

Increase in account payable (139098)

Cash payments for purchases 6,514,794

Total 20,181,304

Increase in rent expense 857,000

Bank overdraft interest 23,704

Gain on sale of freight cars 640,000

Loss on disposal of ten diesel locomotives (387,000)

Loss on sale of high speed electric train (2,700,000)

Wages (6,186,893)

Staff payments (160,000)

Interest paid (12,870)

Tax paid (4,391,112)

Other operating expenses (2,650,296)

Cash generated by operations (14,967,467)

Cash from operating activities 5,213,837

Cash flow from investing activities $ $

Cash payment on purchase of computers (3,215,000)

Cash receipts from sale of tangible assets 890,000

Cash receipts from sale of electric train 100,000

Cash payment on acquisition of plant and machinery (45,000,000)

Disposal of real estate 13,500,000

Cash payment on plant and machinery 5,800,000

Net cash inflow from investing activities 27,925,000

Cash flow from financing activities

Issuance of shares (5,762,345)

Shares on plant and building acquisition (1,556,924)

Proceeds from borrowing from BNZ bank 24,500,000

Cash dividends paid to shareholders (280,000)

Shares repurchased/issued 420,000

Shares reinvested through dividends payments 2,335,386

Bonus shares 510,000

Loan payment to BZN bank 4,768,900

Net cash flows from financing activities 24,935,017

Net increase in cash and cash equivalents 58,073,854

Bank balance brought forward from 2013 financial year 65,872

Cash and cash equivalents at the year-end 58,139,726

1. Disposal of 10 diesel locomotives at no cost is treated as a loss on disposal

2. Sale of 30 freight cars was a gain on disposal calculated as;

Disposal cost 890,000

Recorded cost at the book (250,000)

Gain on disposal 640,000

3. Purchase of computers is an investing activity; this item has been recorded on basis of payment affecting financial year ended 30th June 2014;

Total payments= (675,000+2,540,000)=3,215,000

4. Rental expenses, staff payments and wages are expenses incur on operating activities

5. Acquisition of plant and machinery is an investing activity; payment made in financial year will be calculated as follows;

Payment on delivery (50% on15th June 2014) 2900000

Payment on 14days later (45% on 29th June 2014) 1305000

Total payment 4205000

N/B; 5% of payments will relate to the next financial 2014/2015 at lapse of 3 months.

6. Tax payments will be additions of the following;

Accruals 2012/2013 1567231

Error 2007/2008 235980

Payment of tax due(2013/2014) 2587901

Total tax payments 4391112

7. Bank overdraft interest of $23704 is an operating expense

8. Increase in inventory is calculated as follows;

Inventory as at 30th June 2014 243641

Less closing inventory (30thJune 2014) (132958)

Increase in inventories 110683

9. The interest paid on bank loan is included in operating activities section of cash flow statements.

10. Sales of shares is a financing activity

Inter-pacific limited received $5762345 on sales made n 29th June 2014

References

Rich, J. S., 2012. Cornerstones of financial & managerial accounting. Mason, OH, South-Western/Cengage Learning.