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Question 4 25 pts You are given the following details regarding the accounts of Thumbprint Ltd. The business was formed in 2001 and has been
Question 4 25 pts You are given the following details regarding the accounts of Thumbprint Ltd. The business was formed in 2001 and has been trading profitably and expanding gradually ever since. It has no long term debt at 31 Year ended 31 March 2019 2020 E Profit for the year to 31 March 256,000 223,000 March 2020. Depreciation for the year to 31 March 25,000 19,000 Inventory at 31 March 15,000 18,000 Trade receivables at 31 March 16,000 18,000 Trade payables at 31 March 22,000 20,000 REQUIRED a) Calculate the figure to be shown as "Net cash inflow/(outflow) from operating activities" in the Statement of Cash Flows for the year ended 31 March 2020. 8 marks b) During the year ended 31 March 2020, Thumbprint Ltd disposed of net current assets for 13,000. The book value of those assets was 16.000. How will this be reflected in the Statement of Profit and Loss, and the Statement of Cash Flows? 4 marks c) Thumbprint Ltd is a private limited company, and the directors wish it to remain so. The directors wish to expand the business in the next three years to the extent of doubling current turnover, from a major investment in new non-current assets. The directors have asked you to explain the advantages and disadvantages of the following sources funding: 1. Long-term loans (debentures) II. Leasing III. Using the overdraft facility granted by the bank, but never previously used. w
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