Question

What are the cash flows from financing activities? im very confused on what the financing activities are and don't know how to calculate them.

These are the finandal statements of Metro Meats Ltd METRO MEATS LTD P&L statement for 2015 METRO MEATS LTD Statement of Financial Position as at 31 December Sales revenue 250,000 Assets Cost of sales 2015 2014 210,000 Cash Gross prott 29,000 15,000 40.000 Accounts receivable Less 28,000 14,000 Iwentories 35,000 78,000 25,000 Selling expenses 18,000 Property, plant & equipment Accumulated depredation Total Administrative expenses 60,000 6,000 (20,000) (24,000 Interest 2,000 122,000 118,000 Income taxes 4,000 30.000 Liabilities and equity Proit 10,000 Accounts payable Dividends payable Income tax payable Debentures payable Share capital Retained earnings 26,000 25,000 Additional information 3,000 1 Metro paid a $2,000 interim dividend & dedared a final dividend 5,000 8,000 2 Equipment sold for $8500 cash, original cost of $18,000 and carrying value of $8,500 at the time of sale. 3. All deprediation expense is in the selling expense category 4 All operating expenses except for depredation paid in cash. 27,000 33,000 18,000 14,000 43.000 38,000 122,000 Total 118,000 Required: Complete the statement of cash flows for 2015 below METRO MEATS Ltd Statement of Cash Flows for the year ended 31 December 2015 USE CELL REFERENCES FOR $ VALUE ENTRIES. Cash flows from operating activities Cash receipts from customers 238,000 Cash payments To suppliers 199,000 7,000 For income taes 8.000 For interest 18.500 For other/operating expenses Net cash provided by operating activities 232,500 3.500 Cash flows from inesting activities Sale of plant and equipment Select from drop down menu value S value Cash flows from financing activities: value Redemption of debentures Payment of dividends 5,000 Proceeds from issue of shares value Select from dropdown menu S value

Answer 1

Financing activities

Cash Inflows from financing activities include

• Cash proceeds from the issue of equity or preference shares or similar other instruments.
• The cash proceeds from the issue of debentures, bonds, and similar other instruments.
• The cash receipts from donors limited to long-term purposes, in case of non-profit organizations.
• Cash proceeds from loans and other short-term or long-term borrowings.

Cash Outflows from financing activities include

• Redemption of preference shares or similar other instruments.
• Buy-back of equity shares.
• Redemption of debentures, bonds, and similar other instruments.
• Repayment of loans and other borrowings.
• Payment of interest on debentures, bonds, and loans.
• Payment of dividends on equity and preference share capital.

So here the financing activities will be

_ Debentures Payable:(5000)

_ Debentures payable:(27000)

_ Issue of share capital.18000

Please let me know if you need more clarity.

Regards,

Santosh