Testbankto accompany Applying International Accounting Standards by Alfredson, Leo, Picker, Pacter & Radford Prepared by Victoria Wise John Wiley & Sons Australia, Ltd 2005 Included in this profit was: Depreciation expense of $120 000 Gain on sale of Investments of $28 000 income taxes paid. The cash flow from operating activities during the year was: A B C $785 000.-2- CHAPTER 15 – Cash flow statements Question 1 Warner Limited had the following cash flows during a reporting period: Acquisition of subsidiary. Applying International Accounting Standards – Chapter 15 . $731 000. $915 000. acquisition of subsidiary net of cash acquired. net of cash flows $250 000 Dividends paid $65 000 Repayment of borrowings $90 000 Interest paid on borrowings $57 000 Proceeds from sale of plant $215 000 What is the amount of the cash flows in relation to financing activities of Warner Limited for the reporting period? A B C D Question 2 The following cash flow activities are regarded as investing cash flows: A B C D Question 3 Brett Limited had a net profit after tax of $850 000 for the financial year. $155 000. $212 000. proceeds from issue of debentures. $212 000. Accounts Receivable increased by $39 000 and Inventories decreased by $12 000. interest paid. net cash inflow net cash outflow net cash inflow net cash inflow $155 000. Also. -3D Question 4 During the financial year Marina Limited had sales of $720 000. A discount of $2 000 for prompt payment was received. $790 000. The net cash connected to operating activities was: Applying International Accounting Standards – Chapter 15 . $650 000. $275 000. and the ending balance was $139 000. $263 000. Bad debts amounting to $34 000 were written off during the period. $279 000. Beginning and ending balances were: Beginning balance Inventory $46 000 Accounts Payable $18 000 Ending balance $55 000 $26 000 $718 000. The cash receipts from customers during the year amounted to: A B C D Question 5 During the financial year. $969 000. The amount of cash paid for goods purchased during the year was: A B C D Question 6 Katsis Limited had the following cash flows during the reporting period: Purchase of intangibles $30 000 Proceeds from sale of plant $28 000 Receipts from customers $832 000 Payments to suppliers $593 000 Interest received $17 600 Income taxes paid $45 500 $259 000. The beginning balance of Accounts receivable was $103 000. Cresswell Limited had a Cost of Sales amounting to $260 000. $722 000. The amount of cash and cash equivalents in the subsidiary acquired or disposed of. $163 380. Financing activities. $56 500.-4- A B C D Question 7 $239 100. requires that the aggregate cash flows: A B C D Question 9 In respect to both acquisitions and disposals of investments in subsidiaries. should be presented as operating activities. what was the comparative ending balance of cash for the previous year? A B C D Question 8 When presenting the proceeds from the acquisition and disposal of subsidiaries. IAS 7 Cash Flow Statements. may be set off for presentation purposes. should be presented separately. $256 600. $45 230. IAS 7 Cash Flow Statements. IV. in aggregate. If the company had an ending balance of cash amounting to $107 310. the following: I. $211 100. $(39 220). The portion of the consideration discharged by cash or cash equivalents. requires that an entity should disclose. should be included amongst financing activities. II. $(47 860). Investing activities. III. The total purchase or disposal consideration. $269 100. $53 440. $158 120. The amount of the non-cash assets and liabilities acquired or disposed of. Dim Limited had the following net balance from cash flows: Operating activities. At balance sheet date. Applying International Accounting Standards – Chapter 15 . I. refinancing of long-term debt. II. payment of creditors.-5A B C D I. proceeds on disposal of non-current assets. investing and financing activities have been presented. proceeds from the issue of debentures. investing and financing activities. and III only. II and IV only. III and IV. Question 11 The following item would not appear in a cash flow statement: A B C D receipts of cash from customers. presented in the cash flow statement after operating activities and before investing and financing activities. II. requires that investing and financing transactions that do not require the use of cash or cash equivalents should be: A B C D excluded from a cash flow statement. Applying International Accounting Standards – Chapter 15 . Question 10 Which of the following items would be presented in a cash flow statement? A B C D payment of dividends through a share investment scheme. conversion of preference shares to ordinary shares. presented in a cash flow statement after the operating. acquisition of an investment in a subsidiary for consideration consisting of an exchange of non-current assets and liabilities. included in a cash flow statement before operating. Question 12 IAS 7 Cash Flow Statements. I. II and III only. -6- ANSWERS 1 2 3 4 5 6 7 8 9 10 11 12 B C C B A D C B A C B A Applying International Accounting Standards – Chapter 15 .