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20 marks
FR Section C · 20 marks · suggested: 36 min
Statement of cash flows (Lark Co)
Questions are in English, the exam language. Companies and figures are invented for practice.
The following information relates to Lark Co for the year ended 31 December 20X9. Interest paid is classified under operating activities.
| Item | $ |
|---|---|
| Profit before tax | 450,000 |
| Depreciation | 120,000 |
| Loss on disposal of plant | 15,000 |
| Finance cost in profit or loss | 30,000 |
| Interest paid | 28,000 |
| Inventory: 1 Jan / 31 Dec | 160,000 / 200,000 |
| Trade receivables: decrease in the year | 25,000 |
| Trade payables: increase in the year | 18,000 |
| Income tax liability: 1 Jan / 31 Dec | 60,000 / 70,000 |
| Income tax charge for the year | 95,000 |
| Property, plant and equipment, carrying amount: 1 Jan / 31 Dec | 900,000 / 1,050,000 |
During the year plant with a carrying amount of $45,000 was sold for $30,000, and land was revalued upwards by $50,000.
- (a) Cash generated from operations ($)4 marks
- (b) Income tax paid ($)2 marks
- (c) Net cash from operating activities ($)2 marks
- (d) Purchases of property, plant and equipment ($)3 marks
- (e) Net cash used in investing activities (enter the outflow as a positive number, $)2 marks
- (f) Comment on what the statement of cash flows information tells you about Lark Co.7 marks