Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Oil And Gas Accounting

Authors: Charlotte Wright

6th Edition

9781593703639

More Books

Students also viewed these Accounting questions

Question

What factors contribute to distortions in memory?

Answered: 1 week ago