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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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
Transcribed Image Text:Develop a cash flow statement
Majed is preparing a statement of cash flows for his second year
of trading.
Majed's bank decided to charge 10% interest on his loan to the
business of JD 500 starting year 2. Majed paid this amount in cash
during the year.
The following information is available:
Year 2 (JD)
Year 1 (JD)
Trade receivables
1,120
600
Prepayments
243
243
Trade payables
645
45
Accruals
420
270
Inventories
1000
400
Profit before tax
3,750
1,115
Depreciation expense
Interest paid
150
75
50
Profit on disposal of asset
45
Required:
• Determine the Cash flows from operating activities (year 2)
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