Cash Flow Statement Page 16
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30MODULE - 6A
Cash Flow Statement
Analysis of Financial Statements
C. Cash Flow from financing Activities
(a) Cash proceeds from issuing shares at premium : (Cash inflow)
(b) Payment of dividends : It is related to issue of share capital, a
(Cash outflow)
Notes
(c) Interest paid on debentures : Payment associated with loan
capital (Cash outflow)
(i) Cash payment of a long term loan : Redemption of loan or borrowed
capital (Cash outflow)
INTEXT QUESTIONS 30.3
Classify the following items into (i) Operating (ii) Investing and Financing
activities.
(i) Refund of income tax
(ii) Payment of dividend to shareholder
(iii) Purchase of land and building
(iv) Purchase of plant
(v) Interest paid on debentures.
30.4 TREATMENT OF SPECIAL ITEMS
(i) Payment of Interim Dividends
The following procedure is followed
(i) The amount of interim dividend paid during the year is shown as
outflow of cash in cash flow statement.
(ii) It will be added back to the profits for the purpose of calculating cash
provided from operating activities.
(iii) No adjustment is necessary if the cash provided from operating
activities is calculated on the basis of revised figure of net profit.
77
ACCOUNTANCY
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