FA - May 2015 - L1 - Q6 - Financial Statements Preparation

FA – May 2015 – L1 – Q6 – Financial Statements Preparation

Prepare a statement of cash flows using the direct method for the year ended 31 December 2014 with given financial data.

Question

Financial data extracted from the books of Kandor Enterprises Limited for the year ended 31 December 2014 are shown below:

Details	N’000
Revenue	6,990
Decrease in receivables	177
Cost of sales	5,128
Increase in inventories	1,483
Increase in payables	613
Selling and distribution expenses	300
Administrative expenses	343
Loss on disposal of non-current assets	6
Depreciation charges for the year	62
Ordinary shares issued for cash	400
Purchase of property, plant, and equipment	113
Income tax paid	198
Proceeds from disposal of non-current assets	3
Repayment of loan notes	10
Dividend paid	86
Interest paid on loan notes	191
Cash and cash equivalent at the beginning of the year	(409)

Required:
Prepare the Statement of Cash Flows for the year ended 31 December 2014 using the direct method, showing:
a. Net cash flow from operating activities (5 Marks)
b. Net cash flow from investing activities (5 Marks)
c. Net cash flow from financing activities (5 Marks)
d. Cash and cash equivalents at the end of the year (5 Marks)

Show all workings.

Answer

KANDOR ENTERPRISES LIMITED
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2014