The summarised financial statements of Sal Limited are as follows: Profit & Loss Account/Income Statement for the
Question:
The summarised financial statements of Sal Limited are as follows:
Profit & Loss Account/Income Statement for the year ended 31 December 2019 | £000 |
Operating profit | 150 |
Investment income | 10 |
Interest payable | (27) |
Profit before taxation | 133 |
Taxation | (46) |
Profit after taxation | 87 |
Dividends payable | (60) |
Retained profit | 27 |
Balance Sheets | 2019 | 2019 | 2018 | 2018 |
£000 | £000 | £000 | £000 | |
Fixed/Non-current assets | ||||
Cost | 252 | 270 | ||
Depreciation | (60) | (70) | ||
192 | 200 | |||
Current assets | ||||
Stock/inventory | 175 | 140 | ||
Trade debtors/receivables | 150 | 135 | ||
Short-term deposits | 100 | 110 | ||
Bank | 20 | |||
425 | 405 | |||
Current liabilities | ||||
Trade creditors/payables | 125 | 100 | ||
Interest payable | 8 | 20 | ||
Taxation payable | 10 | 20 | ||
Dividends payable | 17 | 25 | ||
Bank | 10 | |||
(170) | (165) | |||
Non-current liabilities | ||||
Loans | (120) | (170) | ||
NET ASSETS | 327 | 270 | ||
Shareholders’ Funds | ||||
Share capital | 130 | 110 | ||
Share premium account | 50 | 40 | ||
Retained profits | 147 | 120 | ||
327 | 270 |
Additional information
A fixed/non-current asset which originally cost £78,000 and had accumulated depreciation as at the date of sale of £40,000 was sold for a loss of £10,000.”
Required
1. “Prepare Sal Ltd.’s cash flow statement using the indirect method for the year ending 31st December 2019, showing clearly how cash and cash equivalents changed during the year.”
2. “Using the summarised accounts given, and the statement you have just prepared, comment on the position, progress and direction of Sal Ltd.”