Looking Good Interest Paid On Debentures In Cash Flow
1 Cash receipts from the sale of goods and rendering of services.
Interest paid on debentures in cash flow. Calculate Cash flows from financing activities from the following particulars. Vi Dividend paid on preference shares Rs. Additional Information-i New shares and debentures were issued on March 31 2018.
L Interest paid on debentures and long-term loans and advances. Net Increase in Cash and Cash Equivalents. Dividend received on shares held as investment 20000.
It will the net of interest expense for the period less the interest. Using that rate interest is calculated on the amount of debentures for a period for which it is used in the business during a particular year. Interest on new debentures issued 160000 X 16 X 612 12800 Total interest on debentures 128000 12800 140800.
Debentures are a type of loan taken by the company for which interest is payable. Proceeds from issue of 10 debentures. 2 Cash receipts from royalties fees commission and other revenue.
Interest on debentures is a charge against profits and therefore its payment is not subject to the earning of profits. See full answer below. In financing activity Interest on debentures is subtracted to calculate net cash flowused in.
It should be noted in this connection that the company paying interest on debentures is under an obligation to deduct income tax at the prescribed rate from the amount of debenture interest before any payment is made to the debenture-holders. Interest paid on debentures 15000 Proposed Dividend paid 50000 Cash flow from financing activities. Increase in the Bank Overdraft.