operating activities section?

[99.95]

is this right:

operating activities

receipts from debtors      645000
sales                            290000
GST received on sales     29000            964000
payments to creditors     (340000)
purchases of stock         (280000)
wages                          (246000)
GST paid on purchase      (31000)
accrued wages               (2000)
prepaid advertising          (38000)
interest on loan               (1500)          (938500)
net operating cash flow                       25500

[Stormer]

I didn't have that.

You forgot to minus the discount revenue for payments to creditors

[LFTM]

is this right:

operating activities

receipts from debtors      645000
sales                            290000
GST received on sales     29000            964000
payments to creditors     (340000)
purchases of stock         (280000)
wages                          (246000)
GST paid on purchase      (31000)
accrued wages               (2000)
prepaid advertising          (38000)
interest on loan               (1500)          (938500)
net operating cash flow                       25500

weren't you meant to deduct discount revenue from creditors?

[LFTM]

i remember getting a net operating cash flow of 24 000 i think.

[ks04]

I didn't have that.

You forgot to minus the discount revenue for payments to creditors

ahh poo! just realised i forgot to do that too!

[99.95]

I didn't have that.

You forgot to minus the discount revenue for payments to creditors

oh crap.... what would i get out of 6?

[Stormer]

5.

[Chavi]

-1 for the same mistake
I would've put interest expense as the title for interest

[99.95]

5.

fewf..... u serious?

[LFTM]

-1 for the same mistake
I would've put interest expense as the title for interest

what if i just put loan-interest? is this right?

[99.95]

for this question the total cash received for the year is 645000+290000+29000+100000-3000= 1061000?

[Stormer]

That's correct

[99.95]

how bout this question the bussiness reported a net profit but also reported a net outflow of cash from operating activities.

I wrote: net cash flow and net profit are measuring two different things. Net cash flow is measuring the profit which occurs through cash transactions while net profit measures overall profit from both cash and non-cash transactions.

Example 1: receipts from debtors is greater than sales

Example 2: discount revenue and discount expense is excluded from calculating net cash flow

what would i get out of 4?

[LFTM]

I put under accrual accounting there is a difference between revenues earned and received and expenses paid and incurred. Cash and profit are therefore different resources.

Example 1: receipts from debtors less than credit sales
Example 2: GST paid exceeds GST received. Gst has no effect on profit.

wait, did the question ask how a firm can make a profit and suffer a negative bank balance or the other way around?

[ks04]

Example 1: Purchase of a NCA - Small effect of Expense, big effect on cash
Example 2: Drawings - effect cash, not net profit.