Answer to Question #301341 in Finance for hjkol

Question

The following transactions are extracted from MNP Ltd. for the year ended on June 30, 2020: (i) Plant assets sold at Tk. 5,300 which was purchased 6 years before for Tk. 20,000. The plant assets were depreciated on a straight-line basis assuming useful life of 10 years with no residual value. (ii) Issued 10,000 shares of Tk. 10 each at a price of Tk. 43 per share. (iii) Issued shares for a 70% interest in ABC Co. for Tk. 9,00,000. (iv) Patent amortization for the year was Tk. 20,000. (v) The company’s net loss for the year Tk. 50,000. Depreciation charged Tk. 22,000 and realized a gain of Tk. 9,000 on the sale of a land for Tk. 39,000. (vi) A 3-months Govt. Treasury Bill of Tk. 1,00, 000 was purchased. Requirement: State the treatment of the above transactions in the Cash Flow Statement of MNP for the year ended on June 30, 2020

Answer 1

According to IFRS (IAS) 7, information about the movement of finance is submitted for the following activities:

Operating

Financial

Investment

Operating: (v)

Investment: (i), (iv)

Financial: (ii), (iii), (vi)