Questions about ACCG101 (1 Viewer)

[Sweet_Lemon]

This is related to SCF...
I'm a bit confused with the reconciliation of net cash provided by operating activities. It seems to me that they deduct proceeds on sale of shares...(but shares from who)

And sale of shares of other entities is classfied as an inflow to investing activities, while sale/issue of shares (the entity itself)is classified as an inflow to financing activities.

So what's this proceeds on sale of shares about?>.<

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PS: if any of u have other questions, post them on and v can discuss about it...

 

[p.r.i.n.c.e.s.s]

This is related to SCF...
I'm a bit confused with the reconciliation of net cash provided by operating activities. It seems to me that they deduct proceeds on sale of shares...(but shares from who)

And sale of shares of other entities is classfied as an inflow to investing activities, while sale/issue of shares (the entity itself)is classified as an inflow to financing activities.

So what's this proceeds on sale of shares about?>.<

=========
PS: if any of u have other questions, post them on and v can discuss about it...

The "proceeds on sale of shares" is like selling assets and Investment
Buying shares of other entities was an Investment in other companies. So, since they appeared in the Profit and Loss under the revenue section (upon sale), you have to DEDUCT it in the reconciliation from net profit after tax to find net cash from OPERATING ACTIVITIES only.

On the other side, Issue of shares of the entity itself is done to get capital - hence a financing activity and doesn't appear in Reconciliation Statement at all coz it wasn't in P&L initially. Sales of the entity's own share = Redemption = financing section as a negative item in SCF.

Hope that kind of help you sweet lemon!

 

[Sweet_Lemon]

The "proceeds on sale of shares" is like selling assets and Investment
Buying shares of other entities was an Investment in other companies. So, since they appeared in the Profit and Loss under the revenue section (upon sale), you have to DEDUCT it in the reconciliation from net profit after tax to find net cash from OPERATING ACTIVITIES only.

On the other side, Issue of shares of the entity itself is done to get capital - hence a financing activity and doesn't appear in Reconciliation Statement at all coz it wasn't in P&L initially. Sales of the entity's own share = Redemption = financing section as a negative item in SCF.

Hope that kind of help you sweet lemon!

heaps thx...tat helps ^^
the exercise question is quite ambiguous sometimes and makes me confused

 

[p.r.i.n.c.e.s.s]

you're welcome SL

yeah, I tried to do problem 24.7 on pg 993 yesterday... It took me maybe 3hrs to fully understand everything...and I was cheating by looking at the solutions from time to time.

do you reckon we'll have some theory questions about SCF too? Like the purposes, the associated ratios & their meaning, and "Effect questions" ( Increase/Decrease/No Effect) ?

Did any tutors/lecturer mention anything???

 

[Sweet_Lemon]

you're welcome SL

yeah, I tried to do problem 24.7 on pg 993 yesterday... It took me maybe 3hrs to fully understand everything...and I was cheating by looking at the solutions from time to time.

do you reckon we'll have some theory questions about SCF too? Like the purposes, the associated ratios & their meaning, and "Effect questions" ( Increase/Decrease/No Effect) ?

Did any tutors/lecturer mention anything???

25marks is probably purely based on practical side of SCF
The only one that Susan said that will have theory is the ratio chapter, interpreting the ratios.
Conceptual framework might pop up, hopefully in the MCs rather explaining them in words.