Carter, a limited liability company, has non-current assets with a carry value of $300,000 on 1 December 20X7.
During the year ended 30 November 20X8, the following occurred:
In accordance with IAS7 Statement of Cash Flows, what net cash flows from the above transactions would be included within net cash flows from investing activities for the year ended 30 November 20X8?
Suggested solutions:
| Debit | Credit | |
| OB Carrying value | 300,000 | |
| Depreciation | 300,000 | |
| Revalue Surplus | 30,000 | |
| Carrying value of asset disposed of | 40,000 | |
| New Purchase of asset (Derived) | 700,000 | |
| CB Carrying value | 690,000 |
OB + revaluation surplus + purchase -depreciation - disposal of asset =CB
Purchase = CB + disposal of asset + depreciation - revaluation surplus - OB
Answer:
Purchase (outflow) -$700,000 + disposal value (inflow) 55,000
= -645,000
Note: positive inflow means inflow in investing activities; negative inflow means outflow in investing activities.
To do the same topic again in ACCA F3 Investing Cash Flow
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2015 ACCA F3 INVESTING CASH FLOW