Question

State which fo the following would result in inflow/outflow of Cash or Cash Equivalents:
(i) Issue of fully paid bonus shares.
(ii) Writing off bad debts against the provision for Doubtful Debts.
(iii) Declaration of Final dividend.
(iv) Declaration of interim dividend.
(v) Cash Deposited into Bank.
(vi) Cash withdrawn from Bank.
(vii) Purchase fo Marketable Securities for Cash.

Answer 1

Statement Showing the efect of transactions on Cash or Cash Equivalents.
$$\begin{array}{ccc}\left(i\right)& \text{No effect}& \text{Cash is not affected. It is capitalisation of profits.}\\ \left(ii\right)& \text{No effect}& \text{Cash is not affected as it is not a cashy transaction}\\ \left(iii\right)& \text{No effect}& \text{Cash is not affected because final dividend declared will be}\\ & & \text{paid in the next year, if approved by shareholders.}\\ \left(iv\right)& \text{Outflow}& \text{Interim Dividend declared is paid within 5 days of declaration.}\\ \left(v\right)& \text{No effect}& \text{Cash and Bank both are parts of Cash and Cash Equivalents.}\\ \left(vi\right)& \text{No effect}& \text{Cash and Bank Both are parts of Cash and Cash Equivalents.}\\ \left(vii\right)& \text{No effect}& \text{It is merely a conversion of cash into cash equivalents.}\end{array}$$