Page 404 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 24

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
Profit before tax (1) 18,750

Adjustments for:
(2)
Finance costs payable 1,000
Depreciation charge (3) 3,500
Profit on disposal of PPE (4) (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
———

398