The statement of financial position of C.F. Ltd for the year ended 31 December 20X2, together with

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The statement of financial position of C.F. Ltd for the year ended 31 December 20X2, together with comparative figures for the previous year, is shown below.

The statement of financial position of C.F. Ltd for the

Additional information
1. There were no sales of non-current assets during 20X2.
2. The company declared a final dividend of £26,000 for 20X2 (20X1 − £28,000). This is paid immediately after the AGM that takes place two months after the year end. The company does not pay any interim dividends.
3. New debentures and shares issued in 20X2 were issued on 1 January.
4. Property, plant and equipment is made up of the following:
_____________________20X220X1
Equipment...................270..........180
Provision for depreciation (90)..........(56)
..................................180..........124
Required
a. Show your calculation of the operating profit of C.F. plc for the year ended 31 December 20X2.
b. Prepare a statement of cash flows for the year, in accordance with IAS 7 Statement of Cash Flows.
c. State the headings of any other notes that you would be required to include in practice under IAS 7.
d. Comment on the implications of the information given in the question, plus the statements you have prepared, regarding the financial position of the company.
e. IAS 7 supports the use of the indirect method of arriving at the net cash inflow from operating activities, which is the method you have used to answer part (b) of this question. What is the direct method of arriving at the net cash inflow from operations? State, with reasons, whether you agree with the IAS 7 acceptance of the indirect method.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Introduction To Financial Accounting

ISBN: 978-0077138448

7th edition

Authors: Anne Marie Ward, Andrew Thomas

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