Cash book extract

The above is an extract of a cash book from an excel format. This is a simple copy highlighting the transactions that normally happen in the cash book. Just to clarify some items, let us start with the columns:

1. there are are seven columns in this extract. The date, description, Dr and Cr columns are all mandatory while the rest (Check no, Payee and running balance) are optional.
2. the cash book has to be titled by the company name and be indicated as a cash book ( see the first two lines)
3. the date is the transaction date, payee is the name of the person paid or issued the check. Take for example line number four of the cash book. ABC ltd purchased three blackberry phones each @$300 from Amazon Ltd. ABC ltd bought the phones on 7th February and issued the check in the name of Amazon Ltd of $900
4. The running balance represents the amount outstanding on a particular date. On 28th of February the closing balance was  $ 33,827 while on 2nd February the account had a balance of 40,500 

Sample of Cash flow statement

 

The cash flow statement has has four parts i.e. operating activities, investing activities, financing activities and movement in cash & cash equivalents.

Operating activities

1. Cash generated from operations: The cash generated form operations is the net profit after adding back non expenses not involving cash such as depreciation or deducting incomes not involving cash.
2. Interest received: This is interest received for investments e.g. interest received from bank for cash held.
3. Interest paid: Can be such as overdraft interest, hire purchase interest etc
4. Income tax paid: This is tax paid by the firm for the profit earned. Take for example a company made a net profit of one million dollars and is subject to a 30% tax, then the income tax will be three hundred thousand only.

Investing activities

1. Purchase of property, plant and equipment: These are land, buildings, plant machinery, motor vehicles, electronic data processing devices, equipments and furniture purchased for company's use.
2. Prepayment of operating lease rentals- most companies who use offices they don't own pay rent each month for use of such properties. You find that some arrangements between the tenant and landlord is to pay rent in quarterly or half yearly or year. The aspect of prepayment arises when a company pays rent for the period it has not utilized yet. Take for example our financial year ends 31st December and i have paid rent for the first quarter ( January, February and March) of the following year on 20th December of the current year, then the rent paid is what we call a prepayment of operating lease rentals. Other prepayments include insurance, medical schemes etc. 
3. Proceeds from disposal of property, plant and equipment or other fixed assets. This is the cash received for sale of a fixed asset. You realize when arriving at cash generated from operations the profit or loss of assets is actually excluded.  The reason of being exclude is that it is in investing activities category.

Financing activities

1. Proceeds from issue of of ordinary shares: When a company floats shares to stock exchange the cash received from such sale of shares is treated as a financing activity. Shares can also be sold to individuals without floating to the market- this is mostly for private companies.
2. Dividends paid: