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Chapter 20

Example 2: Solution
$ $
Cash flow from operating activities
Cash generated from operations (from Example 1) 81,000
Finance cost (from Example 1 above) (3,000)
Tax paid (16,000)
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Net cash from operating activities 62,000

Cash flows from investing activities
Proceeds of sale of non-current assets 3,000
Payments to acquire non-current assets 35,000)
Investment income (from Example 1 above) 13,000
–––––––
Net cash used in investing activities (19,000)

Cash flows from financing activities
Equity dividends paid (16,000)
Proceeds from issue of shares (120 – 100) 20,000
Repayment of loan notes (30 – 21) (9,000)
–––––––
Net cash used in financing activities (5,000)
–––––––
Net increase in cash and cash equivalents 38,000
Cash and cash equivalents at the beginning of the
period 63,000
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Cash and cash equivalents at the end of the period 101,000
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