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a Company

Question 14

Multiple Choice

Use the following information to answer questions
A company reported the following information for a financial year:
£
Profit from ordinary activities before income tax expense 72,000Income tax expense 20,000Depreciation expense 8,000 Issue of shares40,000 Loan made to another company6,000Increase in trade receivables 1,000 Decrease in inventories2,000 Cash received from loans receivable4,000Dividends paid 2,000\begin{array}{ll}\text {Profit from ordinary activities before income tax expense }&72,000 \\\text {Income tax expense }&20,000 \\\text {Depreciation expense }&8,000 \\\text { Issue of shares}&40,000 \\\text { Loan made to another company}&6,000 \\\text {Increase in trade receivables }&1,000 \\\text { Decrease in inventories}&2,000 \\\text { Cash received from loans receivable}& 4,000\\\text {Dividends paid }&2,000 \\\end{array}

-What is the net cash inflow (outflow) from financing activities?


A) £38 000 net cash inflow;
B) £40,000 net cash inflow;
C) £42,000 net cash inflow;
D) £(2000) net cash outflow.

Correct Answer:

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