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?

Question

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?

Quizplus · Accepted Answer

The interest received figure for the statement of cash flows can be calculated by adjusting the finance income for the year by the change in interest receivable. For 2019, the finance income is £542. The interest receivable increased from £45 in 2018 to £55 in 2019, an increase of £10. Therefore, the cash received for interest would be the finance income minus the increase in receivable: £542 - £10 = £532.

Arpinum Limited Presents the Following Balances in Its Financial Statements