Scottish & Newcastle serves up Courage by the pint. The U.K.'s largest brewer, it makes a number of popular beers, including Courage, John Smith's, Newcastle, and McEwan's. It also makes licensed brands such as Foster's, Kronenbourg, and Miller. As do all U.K. companies, the Edinburgh-based company follows U.K. generally accepted accounting principles. Its cash flow statement prepared according to those principles follows, along with one of the related notes.

Required: 1. Which of the two basic reporting approaches for the statement of cash flows did the company adopt? 2. Compare Scottish & Newcastle's statement with that of Boston Beer presented in Exhibit 13.1.

What differences do you see in the U.S. and U.K. versions of the statement 1

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SCOTTISH & NEWCASTLE PLC Group Cash Flow Statement Year ended 2 May 1999 1999 (52 weeks) 1998 (53 weeks) Notes Em Em Em Em Net cash inflow from operating activities 32 542.7 565.0 Interest received Interest paid Taxation Dividends from joint ventures Returns on investments and servicing of finance Preference dividends paid Net cash outflow for returns on investments and servicing of finance Capital expenditure and financial investment 7.7 2.5 3.0 3.1 (71.0) (59.0) (0.7) (1.1) (68.7) (57.0) (88.2) (82.5) Purchase of tangible fixed assets (374.0) (314.2) Purchase of investments Sale of tangible fixed assets Realisation of investments (45.0) (67.0) 108.5 55.4 43.0 67.4 Net cash outflow for capital expenditure and financial investment Acquisition and disposals Purchase of businesses New Overdraft acquired with businesses (255.1) (270.8) Disposal of investment in joint venture (225.0) (1.0) 2.2 Net cash outflow for acquisitions and disposals Equity dividends paid (148.8) (223.8) (135.8) Net cash outflow before use of liquid resources and financing (10.4) (202.4) Management of liquid resources Movement in short-term deposits with banks 14.4 (2.9) Financing Issues of ordinary share capital 7.2 8.0 Proceeds of loan capital 314.2 388.5 Repayment of loan capital (284.7) (123.0) Net cash inflow from financing 36.7 273.5 Increase in cash in the period 33 40.7 68.2 Liquid resources comprise term deposits of less than one year.