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cash flow statement

Karthik (13 Points)

10 May 2007

I had calrification in cash flow statement.

profit on sale of land are transfer to the Capital reserve,Does it affect the cash flow
statement

Thank u

Karthikeyan

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5 Replies

Aholiyath (31 Points)
Replied 10 May 2007

the entry is
cash a/c dr
to land
land a/c dr
to capital reserve..
but some texts say
cash a/c dr
to capital reserve
to land...
it s shown under cash flows frm investinf activities with the proceeds value...
which entry u will follow? wat logic u give?

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sandhya13sharma (13 Points)
Replied 10 May 2007

All things which are recd. in cash affect the cash flow statement and land is credited only to the extent of its cost and balance is transferred to capital reserve or profit on sale of land which is realised in cash therefore capital reserve on sale of land will be considered in cash flow statement

(Guest)

how to arive the profit before tax on cash flow statement based on two years b\s. profit diff on two year+ tax paid during the year+ proposed divid+ reserve tran during the year how the reserve will be arive?

Ramasubbu K (Sr.GM - Finance & Company Secreta) (685 Points)
Replied 05 September 2007

All cash flows will affect the cash flow statement. On sale of assets there is a cash inflow. So the total sale proceeds will be shown under investment activities. Tranaferring of profit on sale to capital reserve will not affect the cash flow statement.