Deck 6: The Statement of Cash Flows

Question 1

Information extracted from the statement of profit or loss of Bee & Co for the year ended 31 March 20X4 is as follows: The net change in the total of current assets (excluding cash) less current liabilities (inventory, trade receivables and trade payables) for the year was a cash inflow of £1700.
What was the net cash inflow from operating activities for the year ended 31 March 20X4?

A)£19 400
B)£23 600
C)£25 600
D)£17 600

Answer 1

£25 600

Question 2

The carrying amount of non-current assets decreases by £2600 Which three of the statements are correct?

A)2, 3 and 6
B)1, 3 and 5
C)2, 4 and 6
D)1, 4 and 5

Answer 2

1, 4 and 5

Question 3

Parke and Co., a sole trader business, had a net cash outflow from operating activities of £6250 in its financial year ended 31 March 20X5.During the year the business bought non-current assets at a cost of £13 500 and sold non-current assets for proceeds of £3200.Loan interest of £2000 was paid and Jim Parke, the proprietor, introduced further capital of £10 000 in cash.There were no other relevant transactions. What was Parke's net cash inflow or outflow for the year ended 31 March 20X5?

A)Inflow of £12 050
B)Outflow of £18 550
C)Outflow of £8550
D)Inflow of £3950

Answer 3

Outflow of £8550

Question 4

Which one of the following transactions increases or decreases the net cash flow from operating activities?
A.Sale of a non-current asset
B. Drawing cash from the business for personal use by the owner

A)Both of them
B)Neither of them
C)A only
D)B only

Question 5

A business makes an operating profit of £27 600 in its financial year ended 31 December 20X1, after charging £15 200 in depreciation for the year.Its profit before tax was £22 500 and profit after tax was £15 000. The business's net change in the total of current assets (excluding cash) less current liabilities (inventory, trade receivables and trade payables) for the year was a cash outflow of £3300.
What was the net cash inflow from operating activities for the year ended 31 December 20X1?

A)£46 100
B)£26 900
C)£34 400
D)£39 500

Question 6

Extracts from Renée's statements of financial position at 31 December 20X3 and 20X4 show the following information about current assets and current liabilities: Which one of the following statements is correct?

A)There has been a cash inflow in respect of trade payables.
B)There has been a cash inflow in respect of inventory.
C)There has been a cash inflow in respect of trade receivables.
D)None of the above

Question 7

Extracts from Sabrina's statements of financial position at 31 August 20X6 and 20X5 show the following: Operating profit for the year ended 31 August 20X6 was £18 000, and depreciation charged for the year was £6250.
What was the net cash inflow from operating activities for inclusion in the statement of cash flows for the year ended 31 August 20X6?

A)£9750
B)£26 250
C)£26 650
D)£22 250

Question 8

A sole trader business, Elvette and Co., made an operating profit of £28 800 in its financial year ended 31 May 20X4, after charging depreciation of £17 300. At 31 May 20X3, Elvette's current assets (excluding cash) less current liabilities total (i.e.the total of inventory, trade receivables and trade payables) was £63 330.On 31 May 20X4 the equivalent total was £72 280.
What was Elvette's net cash inflow in respect of operating activities for the year ended 31 May 20X4?

A)£2550
B)£37 150
C)£19 850
D)£55 050

Question 9

Extracts from Sally's statement of financial position at 31 December 20X4 are as follows: Sally's statement of cash flows for the year ended 31 December 20X5 included the following information:
Sally's total of current assets less current liabilities at 31 December 20X5 was £86 300 (20X4 - £84 000).
What was Sally's cash balance at 31 December 20X5?

A)£17 500
B)£20 300
C)£19 800
D)£22 100

Question 10

Information extracted from the statement of profit or loss of Cee and Co for the year ended 31 March 20X6 is as follows: The net change in current assets (excluding cash) less current liabilities (inventory, trade receivables and trade payables) for the year was a cash outflow of £2800.What was the net cash outflow from operating activities?

A)£7200
B)£24 800
C)£12 800
D)£15 800

Question 11

Extracts from Melody's statements of financial position at 31 December 20X2 and 20X1 are as follows: Her operating profit for the year ended 31 December 20X2 was £6000 and depreciation charged for the year was £5850.
What was the net cash inflow or outflow from operating activities for inclusion in the statement of cash flows for the year ended 31 December 20X2?

A)£17 500 inflow
B)£9500 inflow
C)£6200 inflow
D)£5500 outflow

Question 12

Hebe's business bought a non-current asset for £18 000 on 1 January 20X1.The decision was made to apply straight-line depreciation over ten years, with an assumption of nil residual value at the end of the ten-year period.Three years later, on 1 January 20X4, Hebe sells the asset for £13 000. What is the total cash effect of the transactions on Hebe's accounts over the three-year period from 1 January 20X1 to 1 January 20X4?

A)Net cash outflow of £5000
B)Net cash outflow of £10 400
C)Net cash outflow of £400
D)Net cash inflow of £5000

Question 13

Manfred's business buys a non-current asset for £5600 on 1 January 20X4.The asset has an expected useful life of three years with an expected residual value of £200.On 1 January 20X7 the asset is sold for £600. What is total net cash outflow incurred by the business in respect of these transactions?

A)£5600
B)£5200
C)£4800
D)£5000

Question 14

A sole trader business, Smithson & Co., made a profit of £6800, after charging interest of £2600 and depreciation of £4800, in its financial year ended 31 August 20X8. At 31 August 20X7, Smithson's current assets (excluding cash) less current liabilities total (i.e.the total of inventory, trade receivables and trade payables) was £16 750.On 31 August 20X8 the equivalent total was £18 870.
What was Smithson's net cash inflow from operating activities for the year ended 31 August 20X8?

A)£16 320
B)£6 880
C)£12 080
D)£9 480

Question 15

A sole trader business, Forby & Co., made an operating loss of £2200 in its financial year ended 30 April 20X2, after charging depreciation of £10 000. At 30 April 20X1, Forby's current assets (excluding cash) less current liabilities total (i.e.the total of inventory, trade receivables and trade payables) was £41 750.On 30 April 20X2 the equivalent total had decreased to £39 550.
What was Forby's net cash inflow or outflow from operating activities for the year ended 30 April 20X2?

A)£14 400 inflow
B)£5 600 outflow
C)£10 000 inflow
D)£5 600 inflow

Question 16

Baljit's business buys a non-current asset on 1 July 20X3 for £9000.The asset is to be depreciated over five years on the straight-line basis, assuming a nil residual value.One twelfth of the annual depreciation is charged for each full month of ownership.Baljit makes no other sales or purchases of non-current assets in the financial year ended 31 December 20X3. What is the cash outflow to be shown in Baljit's statement of cash flows in respect of non-current assets for the year ended 31 December 20X3?

A)£9450
B)£9000
C)£8550
D)None of the above

Question 17

Extracts from Rainer's statements of financial position at 31 March 20X6 and 20X5 are as follows: Operating profit for the year ended 31 March 20X6 was £11 200 and depreciation charged for the year was £8844.
What was the net cash inflow from operating activities for inclusion in the statement of cash flows for the year ended 31 March 20X6?

A)£22 937
B)£5249
C)£17 151
D)£18 041

Question 18

Piggott & Co, a sole trader business, made a net cash inflow from operating activities of £72 200 in its financial year ended 31 December 20X7.During the 20X7 financial year, the business managed to decrease its long-term liability to the bank from £100 000 to £80 000.Loan interest of £6000 was paid, and John Piggott, the proprietor, drew £18 000 from the business for his own personal use.There were no other relevant transactions. What was Piggott's net cash inflow for the year ended 31 December 20X7?

A)£46 200
B)£28 200
C)£68 200
D)£40 200

Question 19

Information extracted from the statement of profit or loss of Dee and Co for the year ended 31 December 20X8 is as follows: The net change in current assets (excluding cash) less current liabilities (inventory, trade receivables and trade payables) for the year was a cash inflow of £3300.What was the net cash inflow from operating activities?

A)£27 400
B)£9600
C)£26 000
D)£29 000

Question 20

Extracts from Jamal's statements of financial position at 30 June 20X4 and 20X3 show the following: Which one of the following statements is correct?
During the financial year ended 30 June 20X4:

A)There was a cash outflow in respect of trade receivables, and there were cash inflows in respect of trade payables and inventory.
B)There were cash outflows in respect of trade receivables and trade payables, and there was a cash inflow in respect of inventory.
C)There were cash inflows in respect of trade receivables and trade payables, and a cash outflow in respect of inventory.
D)There was a cash inflow in respect of trade receivables, and there were cash outflows in respect of inventory and trade payables.

Question 21

Bill, a sole trader, had a net cash outflow from operating activities of £32 400 for the year ended 28 February 20X6.During the year, he received interest of £2600 in respect of a loan made by the business, and drew £10 000 from the business for personal use.There were no other relevant transactions.What was Bill's net cash outflow for the year ended 28 February 20X6?

A)£29 800
B)£45 000
C)£39 800
D)£19 800

Question 22

Carmen, a sole trader, had a net cash inflow from operating activities of £30 250 for the year ended 31 December 20X3.During the year she paid interest on a business overdraft of £650, drew £9000 from the business for personal use, and purchased non-current assets for £5000.There were no other relevant transactions.What was Carmen's net cash inflow for the year ended 31 December 20X3?

A)£24 600
B)£16 900
C)£16 250
D)£15 600

Question 23

Sonya, a sole trader, had a net cash inflow from operating activities of £20 320 for the year ended 31 March 20X6.During the year she took out a business bank loan of £10 000.She paid interest of £600 in respect of this loan.She sold a non-current asset with a carrying amount of £1650 for £3000, replacing it with a new asset for which she paid £12 500.There were no other relevant transactions.What was Sonya's net cash inflow for the year ended 31 March 20X6?

A)£18 870
B)£20 820
C)£20 220
D)£1420

Question 24

Jeff Cavendish, a sole trader, had a net cash inflow from operating activities of £9650 in his financial year ended 31 May 20X2.During the year he sold non-current assets with a carrying amount of £13 750 for £12 000.He purchased new non-current assets for £22 000.He received repayments totaling £6000 in respect of a business loan made to one of his suppliers.Interest received in respect of this loan was £1300.There were no other relevant transactions. What was Jeff's net cash inflow or outflow for the year ended 31 May 20X2?

A)Inflow of £24 350
B)Outflow of £5050
C)Inflow of £6950
D)Inflow of £6100