10 CASH FLOW STATEMENT


Question 2 The following are the Balance Sheets of McSweeney plc as at 31/12/2011 and 31/12/2012, together with an abridged Profit and Loss Account for the year 31/12/2012:


Abridged Profit and Loss Account for the year ended 31/12/2012


Operating Profit Interest for year


Profit before Taxation Taxation for the year Profit after Taxation Dividends Paid


Retained Profit for the year Retained Profits on 01/01/2012 Retained Profits on 31/12/2012


Balance Sheet as at Fixed Assets


Land and Buildings at Cost less Accumulated Depreciation Machinery at Cost


10 less Accumulated Depreciation


Financial Assets Quoted Investments


Current Assets Stock


Debtors Bank Cash


240,000 180,000 2,000


12,000


less Creditors: Amounts falling due within 1 year Trade Creditors Interest Due Taxation Bank


- 326,500 Net Current Assets


Financed By Creditors: Amounts falling due after more than 1 year 10% Debentures


Capital and Reserves €1 Ordinary Shares Share Premium P & L Account


950,000 26,200


67,500 1,043,700 1,293,700


107,500 1,293,700 250,000


900,000 -


60,000 960,000 1,210,000


The following information is also available for the year 2012: 1 There were no disposals of buildings during the year, but new buildings were acquired. 2 There were no purchases of machinery during the year. Machinery was disposed of for €30,000. 3 Depreciation charged for the year on machinery in arriving at the Operating Profit was €16,800.


You are required to: (a) Reconcile the Operating Profit to Net Cash Inflow from operating activities. (b) Prepare the Cash Flow Statement of McSweeney plc for the year ended 31/12/2012.


138


434,000 280,000 45,000


1,500 €


700,000 (21,000) 380,000 (22,800)


31/12/2012 €


679,000 357,200


150,000


260,000 200,000 -


15,000


475,000 305,000 40,000


2,000 14,800 361,800 113,200 1,210,000 250,000


Cash flow tracks money. Add money coming in. Subtract money going out.


150,000 (12,500) 137,500 (55,000) 82,500


(75,000) 7,500


60,000 67,500


€


600,000 (18,000) 420,000 (25,200)


31/12/2011 €


582,000 394,800


120,000


TIP


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