Page 268 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 19

Example 1a

Prepare the cash generated from operations of Spring Co for the year
ended 30 June 20X5.

Solution

Cash generated from operations is calculated as follows:

$000
(1)
Profit before tax 18,750
Adjustments for:
(2)
Finance costs payable 1,000
(3)
Depreciation charge 3,500
(4)
Profit on disposal of PPE (1,500)
(5)
Increase in inventory (38,250 – 35,700) (2,550)
(5)
Decrease in receivables (34,750 – 42,600) 7,850
(5)
Decrease in payables (25,100 – 33,000) (7,900)
———

Cash generated from operations 19,150
———

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