Corporate Accounting Study Material Notes (PDF)

Running head: CORPORATE ACCOUNTING
Corporate Accounting
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

1CORPORATE ACCOUNTING
Table of Contents
Cash flow statement:..................................................................................................................2
Requirement (i):.....................................................................................................................2
Requirement (ii):....................................................................................................................4
Other comprehensive income statement:...................................................................................5
Requirement (iii):...................................................................................................................5
Requirement (iv):...................................................................................................................5
Requirement (v):....................................................................................................................6
Accounting for corporate income tax:........................................................................................6
Requirement (vi):...................................................................................................................6
Requirement (vii):..................................................................................................................6
Requirement (viii):.................................................................................................................7
Requirement (ix):...................................................................................................................8
Requirement (x):....................................................................................................................8
Requirement (xi):...................................................................................................................8
References:...............................................................................................................................10

2CORPORATE ACCOUNTING
Cash flow statement:
Requirement (i):
The statement that represents the overall cash inflows and outflows of a business
organisation is termed as the cash flow statement. For this assignment, Retail Food Group
(RFG) is chosen; which has three cash flow categories, namely, cash flows from operations,
cash flows from financing activities and cash flows from investing activities, as could be
identified from its annual report in 2017.
Cash flows from operations:
Various items are listed under this head; the most significant are cash receipts from
customers, cash payments to suppliers, interest payment, income tax payment and finance
cost (Miao, Teoh and Zhu 2016). The amounts that are recovered from the customers due to
credit sales are called as cash receipts from customers. This item is observed to increase to
$456,000,000 in 2017, the value of which was $332,754,000 in 2016 (Rfg.com.au 2018), as
more cash is recovered from credit sales in the year. Secondly, RFG has incurred certain
amounts for purchasing materials, which are termed as payments to the suppliers. As the
demand for the products of RFG rises in the market, rise could be seen in this item as well
from $239,623,000 in 2016 to $361,329,000 in 2017.
Moreover, RFG is accountable to make interest payments on the borrowed amounts
raised from different sources. Since it has undertaken additional loans, interest payment is
observed to increase from $9,036,000 in 2016 to $9,416,000 in 2017. The final item is the
income tax payment, which RFG has to pay to adhere to the taxation rules of Australia. As
the profit level of the organisation has risen, there is increase in this payment from
$19,298,000 in 2016 to $21,460,000 in 2017.

3CORPORATE ACCOUNTING
Cash flows from financing activities:
The proceeds from share issuance, proceeds from and repayment of borrowings, cash
dividends paid, share issue cost payment and debt issue cost payments are the significant
items disclosed under this head (Ayers, Call and Schwab 2018). The share issue proceeds
signify the earnings that RFG has made on investments. RFG has made proceeds from shares
of $35,600,000 in 2017; however, nothing has been earned in 2016. Moreover, rise could be
observed in case of borrowing proceeds from $148,500,000 in 2016 to $189,500,000 in 2017
due to additional investments made. On the other hand, RFG has managed to reduce its
borrowings payment to $148,372,000 in 2017 from $149,500,000 in 2016. It denotes that no
mature borrowings are present in 2017.
The dividend payment is the distribution of a portion of net earnings made in the
reporting year, which is observed to increase to $42,888,000 in 2017 as compared to
$31,456,000 in 2016 due to increased net income in 2017 (Kent 2017). Moreover, it has to
incur a particular cost at the time of share issuance (Banker, Basu and Byzalov 2016). As
RFG has issued additional shares, the cost of issuing them has increased from $47,000 in
2016 to $543,000 in 2017. However, it has not issued much debt due to which debt issue cost
has declined to $223,000 in 2017 from $802,000 in 2016.
Cash flows used in investing activities:
In this section, the significant items reported include payments for and proceeds from
plant and equipment, payment of intangible assets and interest received. The payments for
plant and equipment are the amounts incurred to purchase as well as acquire these items. This
item has increased in 2017, since additional emphasis has been placed to raise its asset base.
As a result, the proceeds generated from these assets have declined in the year 2017 as
opposed to 2016. The payment of intangible assets denotes the monetary amount, which RFG