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The following is information on the operation of King BBQ Ltd: Net profit is 50,000 Depreciation for Equipment is 3,500 using the straight-line method at

The following is information on the operation of King BBQ Ltd:


  • Net profit is £50,000
  • Depreciation for Equipment is 3,500 using the straight-line method at 10% per annum
  • Depreciation for Vehicles is 4,800 using the reducing balance method at 20% per annum
  • Opening inventory is 38,000; Closing inventory is 45,000 Increase in inventory 
  • Opening debtors is 16,000; Closing debtors is 15,000 
  • Opening creditors is 8,000; Closing creditors is 10,000
  • Interest paid is 1,200
  • Tax paid is 7,500

Required:

Clearly show the calculation of Net Cash from Operation activities using indirect method. 

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