Contract law
Decrease in trades and other payables + provisions (inclu NCL)
Cash flow statement reports amount as - 6129
This includes the $714 CSR adj that we made in calculating NPAT (which doesn’t appear in the actual reported NPAT)
So this figure needs to exclude the $714 otherwise we will double counting it
The amount of decrease should be
-6129 + 714 = -$5415
The 714 represents a loss that would reduce decrease in the payable that is a negative cash flow and reason why we making adjustment if we don’t then will double count it
Repayment of borrowings not same as in cash flow statement. qUESTIOn is why is repayment of borrowings of -36326 reason is, if we go further down to steel and tube actual cash flow statement – they calculated a net movement in cash and cash equivalents of 46326 so cash went up by that amount. But looking at next items the balancewas minus amt of -53828. What that means is firm had a bank overdraft of that amount . At end of year reduced to -7502 but still in credit balance. So bank overdraft is form of borrowings so firm, what is it done paid back some of those borrowings – paid back 46326 to reduce it to 7502. What we have done on worksheet we actually taken that payment of 46326 and included it as part of repayment of borrowings in the financing section of this combined statements. So taken 10000 dollars already reported in cash flow statement which was a positive amt. Then firm paid back 46326 so net is 36326
Need to classify items now
Income tax expense – have to split it up between amt related to operations and amt related to capital cash flow part of the interest expense. To do this:
Income tax
FCF amount = reported tax expense + the tax benefit on interest
=11177 + (6472*0.3)
=11177 + 1942
=13119
After tax interest
CAPCF aMOUNT
= I ( 1-.3)
= 6472 1
=4530
Decrease in WC
Increase in income tax payable 1030 (Decrease in Wc)
Increase in Inventories -2996
Cash flow statement reports amount as - 6129
This includes the $714 CSR adj that we made in calculating NPAT (which doesn’t appear in the actual reported NPAT)
So this figure needs to exclude the $714 otherwise we will double counting it
The amount of decrease should be
-6129 + 714 = -$5415
The 714 represents a loss that would reduce decrease in the payable that is a negative cash flow and reason why we making adjustment if we don’t then will double count it
Repayment of borrowings not same as in cash flow statement. qUESTIOn is why is repayment of borrowings of -36326 reason is, if we go further down to steel and tube actual cash flow statement – they calculated a net movement in cash and cash equivalents of 46326 so cash went up by that amount. But looking at next items the balancewas minus amt of -53828. What that means is firm had a bank overdraft of that amount . At end of year reduced to -7502 but still in credit balance. So bank overdraft is form of borrowings so firm, what is it done paid back some of those borrowings – paid back 46326 to reduce it to 7502. What we have done on worksheet we actually taken that payment of 46326 and included it as part of repayment of borrowings in the financing section of this combined statements. So taken 10000 dollars already reported in cash flow statement which was a positive amt. Then firm paid back 46326 so net is 36326
Need to classify items now
Income tax expense – have to split it up between amt related to operations and amt related to capital cash flow part of the interest expense. To do this:
Income tax
FCF amount = reported tax expense + the tax benefit on interest
=11177 + (6472*0.3)
=11177 + 1942
=13119
After tax interest
CAPCF aMOUNT
= I ( 1-.3)
= 6472 1
=4530
Decrease in WC
Increase in income tax payable 1030 (Decrease in Wc)
Increase in Inventories -2996