Relevant financial information for

Drayton

Plc at 30

September,

20X8

and

20X7,

are presented to the right, in

000s.

Required:

Prepare the 'cash flows from operating activities' section of the company's statement of cash flows for the year ended

30 September, 20X8.

		20X8		20X7
	Inventories	750		630
	Trade receivables	6,800		7,140
	Trade payables	2,500		2,100
	Depreciation charged in the year	995		746
	Profit before tax (after interest) for the year	17,200		11,180

(Complete the necessary drop downs and answer boxes. If there are any deducted amounts, put a minus sign before the number.)

Question content area bottom

Part 1

First, fill in the heading for the statement of cash flows (even though you are only completing the first part of the statement).

Part 2

Next, enter the relevant profit before tax (after interest) figure.

Cash flows from operating activities

Part 3

Next, adjust the profit before tax (after interest) for the effect that depreciation has on cash flows.

Profit before tax (after interest) for the year ended 30 September, 20X8		as above

Part 4

Next, show the adjustments to cash flows from operating activities resulting from changes in the levels of inventories, trade receivables and trade payables in the year. (List deductions first, then additions.)

Profit before tax (after interest) for the year		as above
Add Depreciation		as above

Part 5

Finally, calculate the total cash generated from operations.

Cash generated from operations