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- March 12, 2017 at 3:46 pm #377941
Dear Sir,
Could you please explain how we calculate the cash and cash equivalent for the beginning of the period in the below example?
I am able to calculate all of the steps except this part. The correct answer is 634…The following information relates to Geofrost, a limited liability company, for the year ended 31 October 20X7.
Extracts from the statement of profit or loss for the year ended 31 October 20X7$’000
Profit before tax 15,000
Less tax 4,350
Profit for the year 10,650Statement of financial position as at 31 October
20X7 20X6
$’000 $’000
Assets
Non-current assets 44,282 26,574Current assets
Inventory 3,560 9,635
Receivables 6,405 4,542
Cash 2,045 1,063
12,010 15,240Total assets 56,292 41,814
Equity and liabilities
Capital and reserves
Ordinary share capital 19,365 17,496
Retained earnings 17,115 6,465
36,480 23,961
Non-current liabilities
Loan 8,000 10,300Current liabilities
Bank overdraft 1,230 429
Trade payables 7,562 4,364
Taxation 3,020 2,760
11,812 7,553Total equity and liabilities 56,292 41,814
Additional information:
(1) Depreciation expense for the year was $4,658,000
(2)
Assets with a carrying value of $1,974,000 were disposed of at a profit of $720,000Thank you for all your help! I am working full time unfortunately not yet in accounting related field and your lectures are greatly appreciated!
I’ve watched some of them already a couple of times 🙂with kind regards,
KatalinMarch 13, 2017 at 12:07 am #377983Since the Statements of Financial Position for both years are given in full (and balance) then the cash and cash equivalents at the start of the second year will be those at the end of the first year, then they are simply the cash (1063) less the bank overdraft (429) which is 634.
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