Henrietta runs a business, trading as Spicer & Co. She prepares accounts to 31 March each year. By the year-end 31 March 20X4 the business has run into overdraft. Henrietta asks you to prepare a cash flow statement for the business for the year ending 31 March 20X4 and she provides you with the following information:

Spicer & Co: Profit and loss account (summarised) for the year ending 31 March 20X4

£

Sales 598 731 Less: cost of sales (430 131)

Gross profit 168 600 Expenses excluding depreciation (79 633)

Depreciation (12 471)

Operating profit 76 496 Interest paid (230)

Net profit 76 266 Spicer & Co.: Balance sheets at 31 March 20X4 and 31 March 20X3 20X4 20X4 20X3 20X3

£ He E fa Fixed assets At cost 175 630 128 547 Less: accumulated depreciation (67 248) (54 777)

108 382 VR TUS Current assets Stock 40 747 36 600 Debtors and prepayments 50 661 48 730 Cash at bank —- 7 423 91 408 92 753 Current liabilities Bank overdraft 1 348 =

Creditors and accruals 36 644 35 191 224 | SECTION 2. FINANCIAL ACCOUNTING ig fe £ . £

Net current assets 53 416 S/O 161 798 131332 Capital Capital brought forward 131332 1113335 Profit for the year 76 266 61 297 Drawings (45 800) (41 300)

161 798 312332 Note: There were no disposals of fixed assets during the year.

You are required to prepare a cash flow statement for Spicer & Co. for the year ending 31 March 20X4.

Exercises: answers available to lecturers