The following information relates to Brian Limited for the year ended 30 June 2012: Additional information: 1
Question:
The following information relates to Brian Limited for the year ended 30 June 2012:
Additional information:
1 The company purchased some new vehicles during 2012 for £75,000.
2 During 2012 the company also sold a vehicle for £12,000 in cash. The vehicle had originally cost £25,000, and £10,000 had been set aside for depreciation.
Required:
(a) Prepare a cash flow statement for Brian Limited for the year ended 30 June 2012.
(b) Outline what it tells the managers of BrianLimited.
Profit and loss account for the year to 30 June 2012 £000 230 £000 Gross proft Administrative expenses Loss on sale of vehicle Increase in provision for doubtful debts Depreciation on vehicles Net profit Taxation 76 115 115 65 50 25 25 35 Dividends Retained profit for the year Balance sheet at 30 June 2012 2011 2012 5000 Fixed assets Vehicle at cost Less Depreciation 150 75 75 200 100 100 Current assets Stocks Trade debtors Less Provision for bad and 60 50 80 100 doubtful debts 76 6 142 95 Cash 153 Current liabilities Trade creditors Taxation Proposed dividend (60) (52) (53) (65) (132) 25) (143) 110 85 Capital and reserves Ordinary share capital Profit and loss account 75 10 75 35 110 85
Step by Step Answer:
a BRIAN LIMITED i FRS 1 format a BRIAN LIMITED Cash flow state m ent for the year ended 30 June 2012 000 000 Net cash inflow from operating activities ...View the full answer
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In order to determine the amount of cash created by operating operations, the indirect technique for preparing the statement of cash flows entails adjusting net income with changes in balance sheet.
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