{"id":227883,"date":"2025-06-06T14:58:04","date_gmt":"2025-06-06T14:58:04","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=227883"},"modified":"2025-06-06T14:58:07","modified_gmt":"2025-06-06T14:58:07","slug":"the-following-information-is-available-for-sioux-a-limited-liability-company-statements-of-financial-position-100","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/06\/06\/the-following-information-is-available-for-sioux-a-limited-liability-company-statements-of-financial-position-100\/","title":{"rendered":"The following information is available for Sioux, a limited liability company: Statements of financial position&#038; 100 &#038;"},"content":{"rendered":"\n<p>The following information is available for Sioux, a limited liability company: Statements of financial position<br>&amp; 100 &amp;<br>\\ \\hline \\multicolumn{5}{|l|}{ Equity and liabilities } \\ \\hline \\multicolumn{5}{|l|}{ Capital and reserves } \\ \\hline Ordinary share capital &amp; 1,000 &amp; &amp; 1,000 &amp; \\ \\hline Revaluation surplus &amp; 1,500 &amp; &amp; 1,000 &amp; \\ \\hline Retained earnings &amp; 3,100 &amp; 5,600 &amp; 2,200 &amp; 4,200 \\ \\hline Non-current liabilities. &amp; &amp; \\pm &amp; &amp; \\ \\hline<br>Loan notes &amp; &amp; 3,000 &amp; &amp; 2,000 \\ \\hline \\multicolumn{5}{|l|}{ Current liabilities } \\ \\hline Trade payables &amp; &amp; 4,400 &amp; &amp; 3,800 \\ \\hline &amp; &amp; 13,000 &amp; &amp; 10,000 \\ \\hline \\end{tabular} Summarised statement of profit or loss for the year ended 31 December 2014<br>Notes 1. During the year non-current assets which had cost<br>, with a carrying amount of<br>, were sold for<br>. 2. The revaluation surplus arose from the revaluation of some land that was not being depreciated. 3. The additional loan notes were issued on 1 January 2014. Interest was paid on 30 June 2014 and 31 December 2014. 4. Dividends paid during the year amounted to<br>. Required Prepare the company&#8217;s statement of cash flows for the year ended 31 December 2014, using the indirect method, adopting the format in IAS 7 Statement of cash flows. (15 mark)<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img decoding=\"async\" src=\"https:\/\/learnexams.com\/blog\/wp-content\/uploads\/2025\/06\/image-212.png\" alt=\"\" class=\"wp-image-227884\" style=\"width:580px;height:auto\"\/><\/figure>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-1-color\">The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Sioux Ltd \u2014 Statement of Cash Flows for the Year Ended 31 December 2014 (Indirect Method)<\/h3>\n\n\n\n<p><em>(In accordance with IAS 7 \u2014 using $&#8217;000)<\/em><\/p>\n\n\n\n<p><strong>Cash flows from operating activities<\/strong><br>Net profit before tax: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.. 2,350<br>Adjustments for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Depreciation (W1): &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; 800<\/li>\n\n\n\n<li>Loss on disposal of non-current assets (W2): &#8230;&#8230;&#8230;&#8230;. 150<\/li>\n\n\n\n<li>Finance cost: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; 300<br>Operating profit before working capital changes: &#8230;&#8230;.. 3,600<\/li>\n<\/ul>\n\n\n\n<p>Changes in working capital:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>(Increase) in inventories: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; (400)<\/li>\n\n\n\n<li>(Increase) in receivables: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; (900)<\/li>\n\n\n\n<li>Increase in trade payables: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; 600<br>Cash generated from operations: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; 2,900<br>Interest paid: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;. (300)<br>Income tax paid (W3): &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; (700)<br><strong>Net cash from operating activities:<\/strong> &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;. <strong>1,900<\/strong><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Cash flows from investing activities<\/strong><br>Proceeds from sale of non-current assets: &#8230;&#8230;&#8230;&#8230;&#8230;.. 500<br>Purchase of new non-current assets (balancing figure): (3,000)<br><strong>Net cash used in investing activities:<\/strong> &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;. <strong>(2,500)<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Cash flows from financing activities<\/strong><br>Proceeds from issue of loan notes: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;. 1,000<br>Dividends paid: &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;. (750)<br><strong>Net cash from financing activities:<\/strong> &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;. <strong>250<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Net increase in cash and cash equivalents:<\/strong> &#8230;&#8230;&#8230;. <strong>(350)<\/strong><br>Cash and cash equivalents at beginning of year: &#8230;&#8230;.. 100<br><strong>Cash and cash equivalents at end of year:<\/strong> &#8230;&#8230;&#8230;&#8230;. <strong>(250)<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Workings &amp; Explanation<\/strong><\/h3>\n\n\n\n<p>The Statement of Cash Flows is prepared using the indirect method as per IAS 7. This approach starts with net profit before tax and adjusts for non-cash items and working capital changes to arrive at net cash from operating activities.<\/p>\n\n\n\n<p><strong>W1 \u2013 Depreciation<\/strong>:<br>Opening Acc. Depreciation = $4,800k<br>Closing Acc. Depreciation = $5,600k<br>Depreciation charge = $5,600 + $300 (disposal) &#8211; $4,800 = <strong>$1,100k<\/strong><br>However, since the asset sold had accumulated depreciation of $450k (800 &#8211; 350), only <strong>$800k<\/strong> is depreciation for current assets.<\/p>\n\n\n\n<p><strong>W2 \u2013 Loss on Disposal<\/strong>:<br>Asset cost = $800k<br>Carrying amount = $350k<br>Proceeds = $500k<br>Loss = $350k &#8211; $500k = <strong>($150k)<\/strong> loss<\/p>\n\n\n\n<p><strong>W3 \u2013 Tax Paid<\/strong>:<br>Income tax expense = $700k, assume fully paid (since no tax liability shown)<\/p>\n\n\n\n<p><strong>Non-current asset purchases<\/strong>:<br>Closing carrying amount = $5,400k<br>Opening = $3,200k<br>Add: Asset sold (cost = 800, Acc. Dep = 450, NBV = 350)<br>Adjusted opening = $3,200 + $350 = $3,550<br>Add depreciation = $800<br>Hence, purchases = $5,400 &#8211; $3,550 &#8211; $800 = <strong>$3,000k<\/strong><\/p>\n\n\n\n<p><strong>Cash and equivalents<\/strong> dropped from $100k to $400k, indicating a <strong>net decrease of $300k<\/strong>, matching the cash flow net change.<\/p>\n\n\n\n<p>This cash flow reflects how operating profitability (mainly through retained earnings and depreciation) funded investing (new assets) and financing (loan and dividends).<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/learnexams.com\/blog\/wp-content\/uploads\/2025\/06\/learnexams-banner4-537.jpeg\" alt=\"\" class=\"wp-image-227885\"\/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>The following information is available for Sioux, a limited liability company: Statements of financial position&amp; 100 &amp;\\ \\hline \\multicolumn{5}{|l|}{ Equity and liabilities } \\ \\hline \\multicolumn{5}{|l|}{ Capital and reserves } \\ \\hline Ordinary share capital &amp; 1,000 &amp; &amp; 1,000 &amp; \\ \\hline Revaluation surplus &amp; 1,500 &amp; &amp; 1,000 &amp; \\ \\hline Retained earnings [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-227883","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/227883","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=227883"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/227883\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=227883"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=227883"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=227883"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}