Page 307 - Microsoft Word - 00 BA3 IW Prelims STUDENT.docx

The statement of cash flows

Example 1

ABC had the following items included in its statement of financial position as at
31 December 20X2:

20X2 20X1
$ $
Inventories 25,000 35,000
Receivables 28,000 24,000
Payables 33,000 31,000
In addition, the statement of comprehensive income for the year ended 31

December 20X2 included the following items:

$ $
Gross profit 90,000
Less:
General expenses 17,000
Depreciation on plant 10,000
Loss on disposal of plant 4,000
––––––
(31,000)
––––––
Operating profit 59,000
Add: Investment income 13,000
Less: Finance costs payable (3,000)
––––––
Profit before tax 69,000
Income tax (12,000)
––––––
Profit for the year 57,000

Required:

Using the indirect method calculate ABC's cash generated from
operations for year ended 31 December 20X2?

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