H15020 Corporate Accounting: Cash Flows, Comprehensive Income, and Tax

H15020 Corporate Accounting
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Contents
Cash Flows Statement....................................................................................................................................3
Other Comprehensive Income Statement......................................................................................................5
Accounting For Corporate Income Tax.........................................................................................................8
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Cash Flows Statement
(i) From your firm’s financial statement, list each item of reported in the CASH FLOWS
STATEMENT and write your understanding of each item. Discuss any changes in each
item of CASH FLOWS STATEMENT for your firm over the past year articulating the
reasons for the change.
Galaxy Resources limited is an Australian company ASX listed. It is a mining company which
deals in production of lithium carbonate as well as exploration of minerals. It used to operate its
business operations globally. Cash flow statement of this company and an understanding over it:
Operating activities:
1. Receipts from customers: receipts of raw materials and other goods and services.
2. Payments made to suppliers, contractors and employees: payments made in form of
wages, salaries and other payments.
Investing activities:
1. Interest Received: from mining activities and exploration.
2. Payments for plant, property: cash outflow for purchase of palnt, property and
equipment.
3. Proceeds from pre-production: cash inflow from pre- production of mining.
4. Proceeds from non-current assets: cash inflow from deferred assets.
5. Payments received from acquisition: cash inflow from acquisition and merger of
mining properties.
6. Payments for exploration: cash outflow from exploration of lithium and carbonates.
Financing activities:
1. Proceeds from issue of shares: capital generated from issue of shares and debentures.
2. Bank charges: cash outflow from bank charges and interest paid
3. Proceeds from borrowing: sale proceeds from borrowing.
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4. Transaction cost: book keeping of accounts and register cost.
5. Repayment of borrowing: outflow of cash paying amount with interest
ii) Provide a comparative analysis of your company’s three broad categories of cash flows
(operating activities, investing activities, financing activities) and make a comparative
evaluation for three years.
A brief comparative analysis of galaxy Resources from the three categories of cash flow
statement are given below as
Consolidated Statements of cash flows for the year 31st December 2015, 2016 and 2017
Activities 2015 2016 2017
Operating (7194) 2,621 57,087
Investing 45144 (15,063) (35,154)
Financing 49,766 17,079 29,806
Notes: () brackets show the negative balance of net cash flows and are depicted as cash outflow.
Whereas + shows the positive balance of net cash flows and are ducted as cash inflow.
Operating activities: it is the cash adjustments which rose from operations of the business. The
net cash flow from three years are explained above the difference in 2015-16 is 4573 and in 2016-
17 it is 54,466 both the figures denote the positive balance so there is cash inflow from receipts
from customers and other taxation office.
Investing activities: The difference in 2015-16 is (30,081) and 2016-17 is (20,091). As there is
cash outflow which means payments made for purchase of equipment, plant and property for
mining of lithium and carbonates.
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