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Accounting for Corporate Income Tax Analysis

   

Added on  2021-05-31

13 Pages3056 Words253 Views
Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the StudentName of the UniversityAuthor’s Note

1CORPORATE ACCOUNTINGTable of ContentsCash Flow Statement Analysis........................................................................................................2Requirement [i]............................................................................................................................2Requirement [ii]...........................................................................................................................4Other Comprehensive Income Statement Analysis.........................................................................6Requirement [iii]..........................................................................................................................6Requirement [iv]..........................................................................................................................6Requirement [v]...........................................................................................................................7Accounting for Corporate Income Tax Analysis.............................................................................8Requirement [vi]..........................................................................................................................8Requirement [vii].........................................................................................................................8Requirement [viii]........................................................................................................................8Requirement [ix]..........................................................................................................................9Requirement [x]...........................................................................................................................9Requirement [xi]........................................................................................................................10References......................................................................................................................................11

2CORPORATE ACCOUNTINGCash Flow Statement AnalysisRequirement [i]The analysis of the cash flow statements of the business organizations provides greaterassistance in ascertaining the total amount of cash outflow as well as cash inflow in the businessorganizations. The following discussion sheds light in each item in the cash flow statements ofCSR Limited, Australia.Cash Flow from Operating Activities: As per the 2017 Annual Report of CSR Limited, thereare five major items under the cash flow from operating activities. They are receipts fromcustomers; payment to suppliers and employees; receive of dividends and distributions; interestreceived and the payment of income tax (Heinrichs et al., 2013).Receipts from the customers refer to the money that CSR Limited receives from theircredit sales. As per the cash flow statement, an increase in this item can be seen in 2017 ascompared to 2016; that is $2726 million from $2499.5 million (csr.com.au, 2018). Increase incredit sales is the main reason for this increase. Payment to the suppliers refers to the money thatCSR Limited is required to pay for the credit purchase of building materials. At the same time,the company has to make payment for the salaries of their employees for their businessoperations. An increase in this can outflow is there in 2017 as compared to the past year; that is$2424.6 million as compared to $2246.4 million. Increase in purchase as well as increase in thenumber of employees is the main reason for this increase. The next item is the dividend that CSRLimited has received from their investment in other company. Increase in this amount can beseen that is $14.2 million in 2017 as compared to $11.2 million in 2016. However, decrease canbe seen in the cash inflow from interest received that is $1.9 million in 2017 and $2.5 million in

3CORPORATE ACCOUNTING2016; and decrease in CSR Limited’s investment is the main reason for this decrease(csr.com.au, 2018). As per the cash flow statement, there has been major increase in the paymentfor income tax by CSR Limited due to the increase in their profitability; that is $52.7 million in2017 as compared to 14.6 million in 2016. Cash Flow from Investing Activities: Under this head, CSR Limited has registered five majoritems. They are purchase and proceeds from the sales of property, plant and equipment withother assets; purchase of businesses or controlled entities; acquisition costs and the repayment ofloans and receivables taken in advance (Heinrichs et al., 2013).From the cash flow statement of CSR Limited, it can be seen that the company hasreduced the investment in purchasing property, plant and equipment along with other assets inthe 2017 as compared to the past year; that is -$92.2 million as compared to -$120.0 million in2016 (csr.com.au, 2018). The presence of adequate amount of assets is the main reason for thisdecrease in purchase. On the other hand, decrease in the proceeds from the sale of these assescan be seen in the year 2017 as compared to 2016; that is $44.7 million from 71.2 million. In theyear 2016, CSR Limited did not do any major acquisition of business and massive decrease inthis expenses is the proof of this fact; that is $3.5 million in 2017 from $12.8 million in 2016.Due to the decreased amount of acquisition, there is decrease in the costs related to thisacquisition in 2016; that is -$3.4 million in 2017 as compared to $12.8 million in 2016. Inaddition, it can also be seen that CSR Limited has made large repayment of the taken advancedloans in the year 2017; that is -$5.3 million in 2017 from $0.1 million in 2016 (csr.com.au,2018).

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