Deck 6: The Statement of Cash Flows

Question 1

Jana Limited has the following figures in the financial statements for the year ended 31 August 2019:
$\begin{array}{|l|c|c|}\hline & 2019 & 2018 \\\hline & £ & £ \\\hline \text { Operating (loss)/proft } & (5,000) & 15,000 \\\hline \text { Depreciation charged in year } & 45,000 & 42,000 \\\hline \text { Inventories } & 28,000 & 35,000 \\\hline \text { Trade receivables } & 43,000 & 32,000 \\\hline \text { Trade payables } & 38,000 & 30,000 \\\hline\end{array}$ What is Jana Limited's cash inflow from operating activities for the year ended 31 August 2019 using the indirect method?

A) £14,000
B) £24,000
C) £44,000
D) £54,000

Answer 1

£44,000

Question 2

Barry Limited has the following figures in the financial statements for the year ended 31 March 2019:
$\begin{array}{|l|r|r|}\hline & {2019} & {2018} \\\hline & £ & £ \\\hline \text { Operating profit } & 225,000 & 200,000 \\\hline \text { Loss on disposal of property } & 15,000 & \text { Nil } \\\hline \text { Depreciation charged in year } & 115,000 & 130,000 \\\hline \text { Inventories } & 175,000 & 158,000 \\\hline \text { Trade receivables } & 238,000 & 252,000 \\\hline \text { Trade payables } & 365,000 & 342,000 \\\hline\end{array}$ What is Barry Limited's cash inflow from operating activities for the year ended 31 March 2019 using the indirect method?

A) £271,000
B) £317,000
C) £347,000
D) £375,000

Answer 2

£375,000

Question 3

Boris Limited has the following figures in the financial statements for the year ended 31 December 2019:
$\begin{array}{|l|r|r|}\hline & 2019 & {2018} \\\hline & £ & £ \\\hline \text { Operating profit } & 110,000 & 130,000 \\\hline \text { Profit on disposal of property } & 20,000 & 5,000 \\\hline \text { Depreciation charged in year } & 65,000 & 62,000 \\\hline \text { Inventories } & 75,000 & 70,000 \\\hline \text { Trade receivables } & 92,000 & 85,000 \\\hline \text { Trade payables } & 88,000 & 100,000 \\\hline\end{array}$ What is Boris Limited's cash inflow from operating activities for the year ended 31 December 2019 using the indirect method?

A) £131,000
B) £155,000
C) £169,000
D) £179,000

Answer 3

£131,000

Question 4

Interest received is classified under cash flows from financing activities.

Question 5

The statement of cash flows can be presented using either the direct or the indirect methods. Using figures from the statement of profit or loss and the statement of financial position, cash received from sales can be calculated as the balancing figure on the trade receivables control account. Which one of the following is the correct method by which to calculate cash received from sales when using this approach?

A) Cash received from sales = sales - trade receivables brought forward + trade receivables carried forward.
B) Cash received from sales = sales + trade receivables brought forward - trade receivables carried forward.
C) Cash received from sales = sales + trade receivables brought forward + trade receivables carried forward.
D) Cash received from sales = sales - trade receivables brought forward -trade receivables carried forward.

Question 6

Pollonia Limited draws up its statement of cash flows using the direct method. At 1 September 2018, the company had trade receivables of £75,343. During the year to 31 August 2019, the company made sales of £745,282. At 31 August 2019, the company's trade receivables totalled up to £83,897. What was the cash received from sales during the year to 31 August 2019?

A) £736,728
B) £745,282
C) £753,836
D) £904,522

Question 7

Juno Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{c}&£ \\\text { Sales for the year to 31 July 2019 } &365,268 \\\text { Irrecoverable debts written off during the year } &3,765 \\\text { Trade receivables at 31 July 2019 } &77,159 \\\text { Trade receivables at 31 July 2018 } & 80,200\end{array}$ What was the cash received from sales for the year to 31 July 2019?

A) £358,462
B) £362,227
C) £364,544
D) £372,074

Question 8

Artemis Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{lr}&£ \\\text { Sales for the year to } 31 \text { May } 2019 & 550,000 \\\text { Trade receivables at } 31 \text { May } 2019 & 75,000 \\\text { Allowance for receivables at } 31 \text { May 2019 } & 9,000 \\\text { Trade receivables at } 31 \text { May } 2018 & 68,000 \\\text { Allowance for receivables at } 31 \text { May 2018 } & 6,000\end{array}$ What was the cash received from sales for the year to 31 May 2019?

A) £543,000
B) £546,000
C) £554,000
D) £557,000

Question 9

Volsinii Limited draws up its statement of cash flows using the direct method. The company presents the following balances in its financial statements for the years ended 31 October 2019 and 31 October 2018:
$\begin{array}{lrc} & 2019 & 2018 \\& £ & £ \\\text { Cost of sales for the year } & 545,000 & 505,000 \\\text { Closing inventory at the end of the year } & 79,000 & 72,000 \\\text { Trade payables carried forward } & 89,500 & 85,000\end{array}$ Based on these figures, how much cash was paid to suppliers (trade payables) during the financial year ended 31 October 2019?

A) £533,500
B) £540,500
C) £547,500
D) £556,500

Question 10

Lars Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{lr}& £ \\\text { Purchases for the year to } 31 \text { May } 2019 & 375,000 \\\text { Trade payables at } 31 \text { May } 2019 & 42,650 \\\text { Discounts received for the year to } 31 \text { May } 2019 & 6,250 \\\text { Trade payables at } 31 \text { May } 2018 & 44,815 \\\text { Purchase returns for the year to } 31 \text { May 2019 } & 22,500\end{array}$ What was the cash paid to suppliers during the financial year to 31 May 2019?

A) £344,085
B) £348,415
C) £356,585
D) £360,915

Question 11

Ardea Limited draws up its statement of cash flows using the direct method. The company presents the following balances in its financial statements for the years ended 31 May 2019 and 31 May 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\text { Cost of sales } & 765,239 & 721,488 \\\text { Inventory at 31 May } & 79,368 & 82,415 \\\text { Trade payables at 31 May } & 99,221 & 101,911\end{array}$ Based on these figures, how much cash was paid to suppliers (trade payables) during the financial year ended 31 May 2019?

A) £764,882
B) £765,596
C) £767,929
D) £770,976

Question 12

Antium Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{lc}& £ \\ \text { Cost of sales for the year to 30 April 2019 } &888,765 \\ \text {Purchases for the year to 30 April 2019 } &894,321 \\ \text { Trade payables at 30 April 2018 } &78,650 \\ \text { Discounts received for the year to 30 April 2019 } &10,225 \\ \text { Trade payables at 30 April 2019 } &81,254 \\ \text { Purchase returns for the year to 30 April 2019 } &32,777\end{array}$ What was the cash paid to suppliers during the financial year to 30 April 2019?

A) £843,159
B) £848,715
C) £853,923
D) £869,165

Question 13

Tibur Limited draws up its statement of cash flows using the direct method. The company presents you with the following figures:
$\begin{array}{lc}&£ \\ \text {Statement of profit or loss total expenses for the year } &25,663 \\ \text { Depreciation charge for the year } &10,591 \\ \text { Accruals at 31 December 2018 } &1,892 \\ \text { Prepayments at 31 December 2019 } &1,425 \\ \text { Accruals at 31 December 2019 } &2,718 \\ \text { Prepayments at 31 December 2018 } &879\end{array}$ What was the cash paid for expenses during the financial year to 31 December 2019?

A) £12,766
B) £14,792
C) £15,352
D) £17,378

Question 14

Gabii Limited draws up its statement of cash flows using the direct method. The company presents the following balances in its financial statements for the years ended 31 March 2019 and 31 March 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\text { Prepayments at the year end } & 5,728 & 6,329 \\\text { Accruals at the year end } & 8,491 & 7,795 \\\text { Total statement of profit or loss expenses } & 104,292 & 95,670 \\\text { for the year } & 25,445 & 22,386 \\\text { Depreciation for the year } & 3,422 & 4,686\end{array}$ Based on these figures, what cash payments were made for expenses in the financial year ended 31 May 2019?

A) £75,882
B) £76,286
C) £78,814
D) £78,880

Question 15

Nola Limited draws up its statement of cash flows using the direct method. The company presents the following balances in its financial statements for the years ended 31 May 2019 and 31 May 2018:
$\begin{array}{lrr}& 2019 & 2018 \\& £ & £ \\\text { Depreciation for the year } & 38,415 & 33,655 \\\text { Accruals at the year end } & 10,135 & 9,429 \\\text { Total statement of profit or loss expenses } & 125,693 & 108,342 \\\text { for the year } & 7,655 & 8,480 \\\text { Prepayments at the year end } & 4,200 & 3,100\end{array}$ Based on these figures, what was the cash paid for expenses in the financial year ended 31 May 2019?

A) £81, 547
B) £84,609
C) £84,647
D) £89,947

Question 16

Pompeii Limited draws up its statement of cash flows using the direct method. The company presents the following balances in its financial statements for the years ended 28 February 2019 and 28 February 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\text { Total statement of profit or loss expenses } & 105,422 & 98,717 \\\text { for the year } & 18,995 & 15,632 \\\text { Depreciation for the year } & 2,400 & 1,200 \\\text { Allowance for receivables at the year end } & 5,245 & 4,745 \\\text { Accruals at the year end } & & \\\text { Prepayments at the year end } & 4,388 & 5,265 \\\text { Irrecoverable debt recovered } & 450 & -\end{array}$ Based on these figures, what was the cash paid for expenses in the financial year ended 28 February 2019?

A) £83,100
B) £83,400
C) £84,300
D) £85,800

Question 17

Capri Limited presents the following balances in its financial statements for the years ended 31 October 2019 and 31 October 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\begin{array}{lcc}\text { Carrying amount of property, plant and } \\\text { equipment at the end of the financial year }\end{array} & 635,491 & 541,732 \\\begin{array}{lcc}\text { Depreciation charge for the year }\end{array} & 123,895 & 110,433 \\\begin{array}{l}\text { Carrying amount of property, plant and } \\\text { equipment disposed of during the year }\end{array} & 17,322 &--\end{array}$ Based on these figures, what was the cash paid to acquire property, plant and equipment in the financial year ended 31 October 2019?

A) £12,814
B) £200,332
C) £221,514
D) £228,976

Question 18

At 1 December 2018, the property, plant and equipment of Ostia Limited had a carrying value of £432,798. During the year ended 30 November 2019, £88,996 of depreciation was charged on property, plant and equipment. The company received cash of £15,325 during the year from the sale of various items of property, plant and equipment The items of property, plant and equipment sold had cost £25,000 and depreciation of £12,225 had been charged on these items of property, plant and equipment up to the date of disposal. At 30 November 2019, the property, plant and equipment had a carrying amount of £440,452.
Based on these figures, how much cash was paid to acquire property, plant and equipment in the financial year ended 30 November 2019?

A) £108,875
B) £109,425
C) £111,975
D) £121,650

Question 19

At 1 September 2018, the property, plant and equipment of Tusculum Limited had a carrying value of £379,149. During the year ended 31 August 2019, additions with a cost of £167,382 were made. The company sold various items of property, plant and equipment during the year. These items of property, plant and equipment sold had a carrying amount of £25,491 at the date of disposal. At 31 August 2019, the property, plant and equipment had a carrying amount of £422,185.
Based on these figures, how much depreciation was charged on property, plant and equipment in the financial year ended 31 August 2019?

A) £98,855
B) £149,837
C) £184,927
D) £235,909

Question 20

Additions to property, plant and equipment are debited to the property, plant and equipment T account. The cash paid to acquire property, plant and equipment is always the same as the additions figure in the property, plant and equipment account.

Question 21

At 1 June 2018, the property, plant and equipment (PPE) of Alba Limited had a carrying value of £848,149. During the year ended 31 May 2019, depreciation of £248,322 was charged on PPE and the company sold various items of PPE with a carrying amount of £34,977 at the date of disposal. At 31 May 2019, the PPE had a carrying amount of £685,482. At 1 June 2018, trade payables for purchases of PPE amounted to £20,351. At 31 May 2019, trade payables for purchases of PPE totaled up to £15,419.
Based on this information, what figure for cash payments to acquire property, plant and equipment will appear in the statement of cash flows of Alba Limited for the financial year ended 31 May 2019?

A) £105,213
B) £115,700
C) £120,632
D) £125,564

Question 22

At 1 April 2018, the property, plant and equipment (PPE) of Tarracina Limited had a carrying value of £676,419. During the year ended 31 March 2019, depreciation of £174,220 was charged on PPE and the company sold various items of PPE with a carrying amount of £20,114 at the date of disposal. At 31 March 2019, the PPE had a carrying amount of £720,333. At 1 April 2018 and 31 March 2019, trade payables for purchases of PPE amounted to £48,721 and £55,993 respectively.
Based on this information, what figure for cash payments to acquire property, plant and equipment will appear in the statement of cash flows of Tarracina Limited for the financial year ended 31 March 2019?

A) £230,976
B) £238,248
C) £245,520
D) £342,962

Question 23

At 1 September 2018, Cremona Limited had a taxation liability of £25,734. At 31 August 2019, the company's taxation liability stood at £28,321. The statement of profit or loss for the financial year ended 31 August 2019 showed an income tax charge for the year of £30,429. Based on this information, what figure for cash paid for taxation will appear in the statement of cash flows of Cremona Limited for the financial year ended 31 August 2019?

A) £23,626
B) £27,842
C) £30,429
D) £33,016

Question 24

Frusino Limited presents the following balances in its financial statements for the years ended 28 February 2019 and 28 February 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\text { Income tax liability at the year end } & 35,747 & 38,219 \\\begin{array}{l}\text { Statement of profit or loss income tax } \\\text { charge }\end{array} & 34,846 & 37,304\end{array}$ Based on these figures, what was the cash paid for taxation that will appear in the statement of cash flows of Frusino Limited for the financial year ended 28 February 2019?

A) £32,374
B) £37,318
C) £39,120
D) £39,776

Question 25

Norba Limited presents the following balances in its financial statements for the years ended 31 July 2019 and 31 July 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\& & \\\text { Income tax liability at the year end } & 45,318 & 15,419 \\\begin{array}{l}\text { Statement of profit or loss income tax } \\\text { charge }\end{array} & 50,994 & 42,612 \\\begin{array}{l}\text { Income tax refund received }\end{array} & 320 & -\end{array}$ Based on these figures, what was the total cash paid by Norba Limited for taxation in the financial year ended 31 July 2019?

A) £13,033
B) £20,775
C) £21,095
D) £21,415

Question 26

At 31 December 2018, the balance on Caere Limited's retained earnings stood at £51,700. During the year ended 31 December 2019, the company made a profit for the year of £57,400. The balance on Caere Limited's retained earnings at 31 December 2019 was £58,900. How much was the cash dividend paid by the company during the financial year ended 31 December 2019?

A) £7,200
B) £50,200
C) £53,200
D) £64,600

Question 27

At 31 October 2018, the balance on Setium Limited's retained earnings stood at £107,800. During the year ended 31 October 2019, the company made a loss for the year of £18,500. The balance on Setium Limited's retained earnings at 31 October 2019 was £75,500. How much was the cash dividend paid by the company during the financial year ended 31 October 2019?

A) £13,800
B) £32,300
C) £50,800
D) £164,800

Question 28

Neapolis Limited has 40,000 shares in issue. On 31 August 2018, the company declared a final dividend for the financial year ended 31 August 2018 of 25 pence per share. This final dividend was paid on 31 October 2018. On 1 February 2019, the company declared an interim dividend of 10 pence per share with this dividend being paid to shareholders on 30 April 2019. On 31 August 2019, the company declared a final dividend for the year ended 31 August 2019 of 35 pence per share, this final dividend to be paid on 31 October 2019. What figure will Neapolis Limited present in its statement of cash flows for the financial year ended 31 August 2019 for dividends paid during the year?

A) £10,000
B) £14,000
C) £18,000
D) £28,000

Question 29

Arpinum Limited presents the following balances in its financial statements for the years ended 31 July 2019 and 31 July 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\text { Interest receivable at the end of the year } & 55 & 45 \\\begin{array}{l}\text { Statement of profit or loss interest receivable } \\\text { (finance income) for the year }\end{array} & 542 & 522\end{array}$ Based on these figures, what interest received figure will be disclosed by Arpinum Limited in its statement of cash flows for the financial year ended 31 July 2019?

A) £442
B) £512
C) £532
D) £552

Question 30

At 1 November 2018, Sora Limited had interest receivable of £74. The statement of profit or loss for the year to 31 October 2019 presents a figure of £735 for interest receivable (finance income). At 31 October 2019, Sora Limited had accrued interest receivable of £61 owing to the company. Based on these figures, what interest received figure will be disclosed by Sora Limited for interest received in its statement of cash flows for the financial year ended 31 October 2019?

A) £600
B) £722
C) £735
D) £748

Question 31

Cortona Limited presents the following balances in its financial statements for the years ended 30 September 2019 and 30 September 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\text { Interest receivable at the end of the year } & 68 & 88 \\\text { Interest received (= cash) during the financial } & 848 & 828\end{array}$ Based on these figures, what interest receivable (finance income) figure will be disclosed by Cortona Limited in its statement of profit or loss for the financial year ended 30 September 2019?

A) £808
B) £828
C) £868
D) £1,004

Question 32

Perusia Limited presents the following balances in its financial statements for the years ended 31 March 2019 and 31 March 2018:
$\begin{array}{lcc}&2019 & 2018 \\&£ & £ \\ \text { Interest payable accrued at the end of the year } &1,084 & 988 \\ \text { Statement of profit or loss interest payable } &13,108 & 12,572\\ \text { (finance expense) for the year } \end{array}$ Based on these figures, what interest paid figure will be disclosed by Perusia Limited in its statement of cash flows for the financial year ended 31 March 2019?

A) £12,476
B) £13,012
C) £13,108
D) £13,204

Question 33

At 1 November 2018, Venusia Limited had a liability for interest payable of £1,800. The statement of profit or loss for the year to 31 October 2019 presents a figure of £22,200 for interest payable (finance expense). At 31 October 2019, Venusia Limited had accrued interest payable of £2,000 owed by the company. Based on these figures, what cash paid will be disclosed by Venusia Limited in respect of interest payable in its statement of cash flows for the financial year ended 31 October 2019?

A) £18,400
B) £22,000
C) £22,400
D) £26,000

Question 34

Sentinum Limited presents the following balances in its financial statements for the years ended 30 April 2019 and 30 April 2018:
$\begin{array}{lcc} & 2019 & 2018 \\& £ & £ \\\text { Interest payable at the end of the year } & 2,415 & 1,972 \\\text { Cash paid to lenders during the financial year } & 16,106 & 15,872\end{array}$ Based on these numbers, what interest payable (finance expense) figure will be disclosed by Sentinum Limited in its statement of profit or loss for the financial year ended 30 April 2019?

A) £15,429
B) £15,663
C) £16,315
D) £16,549