Statements of financial position of Pilchard Ltd are given below: You are informed as follows: (i) Shown
Question:
Statements of financial position of Pilchard Ltd are given below:
You are informed as follows:
(i) Shown is an extract of the Statement of income for the year ended 31.3.2012.
(ii) There was no acquisition or disposal of non-current assets during the year.
(iii) Loan notes were redeemed at par on 31 March 2012.
Required:
(a) Prepare a Statement of cash flows for the year ended 31 March 2012 using the indirect method.
(b) Prepare a Statement of cash flows on the direct method, taking account of the following additional information:
(i) Sales in the year were £840,000
(ii) Purchases in the year were £620,000.
Clue: The cash balance at beginning of the year was £12,000 whereas the corresponding amount at the end (£3,000 − £11,000 overdraft) was £8,000 negative. Cash outflow = £20,000.
Step by Step Answer:
Financial Accounting An Introduction
ISBN: 9780273737650
2nd Edition
Authors: Mr Barry Elliott, Mr Augustine Benedict