Hi! I'm trying to work this question out for an exam and keep getting conflicting figures from both approaches, could someone please help?! Sorry about the format, did my best
The following summarised data has been extracted from the accounts of a business
On December 31st 2008:
Profit and Loss for year ended 31st December 2008
€ 000
Sales 2700
COGS (1100)
Gross Profit 1600
Admin and Selling Costs (600) (See note 1)
Profit before interest and tax 1000
Dividends received 100
PBIT 1100
Interest (250)
P after Interest, before tax 850
Tax (300)
Profit 550
(Note 1: An analysis of expenses is as follows: Personnel Salaries €320,000,
Accrued Salaries €12,000 , Sundry Expenses €53,000 and Depreciation €215,000)
Extract from Balance Sheet
31st December 2007 31st December 2008
Stocks 800 1200
Debtors 540 820
Trade Creditors 600 450
Taxation 500 300
Accrued Interest 50 150
REQUIRED:
You are required to prepare the section of the cash flow statement relating to cash generated from operations using:
a) The Direct Approach
b) The Indirect Approach
The following summarised data has been extracted from the accounts of a business
On December 31st 2008:
Profit and Loss for year ended 31st December 2008
€ 000
Sales 2700
COGS (1100)
Gross Profit 1600
Admin and Selling Costs (600) (See note 1)
Profit before interest and tax 1000
Dividends received 100
PBIT 1100
Interest (250)
P after Interest, before tax 850
Tax (300)
Profit 550
(Note 1: An analysis of expenses is as follows: Personnel Salaries €320,000,
Accrued Salaries €12,000 , Sundry Expenses €53,000 and Depreciation €215,000)
Extract from Balance Sheet
31st December 2007 31st December 2008
Stocks 800 1200
Debtors 540 820
Trade Creditors 600 450
Taxation 500 300
Accrued Interest 50 150
REQUIRED:
You are required to prepare the section of the cash flow statement relating to cash generated from operations using:
a) The Direct Approach
b) The Indirect Approach