How cash for such activities is reported on a statement

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Reference no: EM131967298

Problem

A company borrowed R100 000 from its bank and the next day used R80 000 of the cash from the loan to buy a piece of equipment for its plant.

a) Explain how cash for such activities is reported on a statement of cash flow.

b) Will this transaction have an impact on analysing the financial statements in general? Explain which ratios could be affected by this transaction.

Reference no: EM131967298

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