ACCA FA · Guided practice (Show me how)
Chapter 14: Statements of Cash Flows
Meadow Limited - statement of cash flows, indirect method
Meadow Limited - statement of financial position as at 31 December 2021 ($):
| 2021 | 2020 | |
|---|---|---|
| Non-current assets | 720,000 | 600,000 |
| Inventories | 130,000 | 110,000 |
| Receivables | 84,000 | 96,000 |
| Cash | 38,000 | 90,000 |
| Total assets | 972,000 | 896,000 |
| $1 ordinary shares | 250,000 | 200,000 |
| Share premium account | 40,000 | 20,000 |
| Accumulated profits | 486,000 | 426,000 |
| 10% loan notes | 60,000 | 100,000 |
| Trade payables | 96,000 | 120,000 |
| Corporation tax payable | 40,000 | 30,000 |
| Total equity and liabilities | 972,000 | 896,000 |
Statement of profit or loss for the year ended 31 December 2021: revenue $1,400,000; cost of sales $910,000; gross profit $490,000; administrative expenses $371,000; operating profit $119,000; interest $8,000; profit before tax $111,000; tax $36,000; profit after tax $75,000.
The following information is relevant:
Administrative expenses include depreciation of $90,000.
During the year there had been sales of non-current assets for $14,000. The assets sold had originally cost $60,000 and had a carrying value of $20,000.
Dividends paid during the year were $15,000. All interest charged was paid.
(a) Cash flows from operating activities
Prepare the cash flows from operating activities of Meadow Limited for the year ended 31 December 2021, using the indirect method.
(b) Investing and financing activities
Prepare the cash flows from investing activities and from financing activities of Meadow Limited for the year ended 31 December 2021, and calculate the net change in cash and cash equivalents for the year.
Opening this exercise…