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

Question

Quizplus · Accepted Answer

The correct answer is A.The cash inflow from operating activities for the year ended 31 December 2019 using the indirect method is £131,000. This is calculated by adding back the non-cash expenses (depreciation) and subtracting the increase in working capital (inventories + trade receivables - trade payables).

Boris Limited Has the Following Figures in the Financial Statements