Specimen 2 Question 1 (b) - Working Capital Adjustments

I don't have the question, so I've made one up:

Try this one:

Inventory b/f 300 c/f 250

Inventory of sub sold in year 80

So:

We start with 300, 80 goes when the sub leaves , which means that 220 remains

But if we have 250 at end we must have bought another 30

Therefore cash outflow (in brackets) of 30

Does that solve it?

Thanks Stephen, the original question is like this:

Movements of working capital in the prepopulated CSOCF (which has not considered the impact of the disposal of S):

Increase in inventories (842.4)

Increase in trade receivables (379.2)

Increase in trade payables 224.2

Carrying amount of working capital of S on disposal:

inventories 200.5

trade receivables 181.3

trade payables (124.6)

In the answer, the adjustments are:

Increase in inventories (842.4) (200.5)

Increase in trade receivables (379.2) (181.3)

Increase in trade payables 224.2 124.5

Why is the adjustment showing a negative impact on cash flows e.g. inventory?

Thank you so much!

Assume as above, and that opening inventory is 1000 and closing inventory is 1842.4, hence, on the face of it, increase in inventory is (842.4)

If we take account of the disposal, opening was 1000, sub sold took 200.5 with it, leaving 799.5

So increase in inventory is 1842.4 minus 799.5, expressed as (1042.9) in CFS

So adjustment is to extra outflow of 1042.9 minus 842.4, expressed as (200.5) in CFS

I think that's right. :)