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| Words: 2150 | Submitted: 03-Dec-2011 This is what the first 3 pages of the essay look like    DescriptionEssay about cash flowPreviewCash Flow StatementLiz & Sophie Cash flow Statement, for the year ending 31 Dec 2008 £ £ Cash inflows during Year 3 From sales (Note: 1) 140,000 From Debtors 6,500 146,500 Cash outflows during Year 3 Pay Creditors (10,000) Cost of products (Note: 2) (83,333) Personnel Cost (73,000) Loan repayment (Note: 3) (2,100) Bank Interest (Note: 4) (1,176) (169,609) Net cash outflow during year: (23,109) ====== Opening cash balance: 24,000 Closing cash balance: (Note: 5) 891 Please note: The brackets for outflows are listed as outflows. Assumptions: 1. Long term loan repayment of £2,100 is for the year 2007 is paid in 2008 – I take this to mean that loan took out on year 2006 and first repayment due in January 2007 second repayment in January 2008 and third will be in January 2009. 2. I assume increase in stock value from 15K to 25K is not considered as purchase of stock in cash flow statement. Product purchased remains at £100K. Background calculations for the Cash flow Statement Note1: Cash Sales working: Sales Total for the year: £175,000 80 % paid cash 80/100 * £175,000 = £140,000 Note 2: Cost of Products working: Products purchased year 3: £100,000 Paid for year 3: 10/12 months 10/12*£100,000 = £83,333 Paid for next year 2009: 2/12 months 2/12*£100,000 = £16,666 Note 3: Long term repayment working: Long term loan: £21,000 Paid 1/10 yearly of original loan Therefore 1/10*£21,000 = £2,100 Note 4: Bank Interest payment working: Bank interest 7% Long term loan: £21,000 £21,000/10 = £2,100 * 2 year = £4,200 £21,000 - £4,200 = £16,800 Therefore £16,800 * 7% = £1,176 Note 5: Cash Account working DR CR Opening Cash £24,000 Credit –stock £10,000 Sales £140,000 Creditors – product £83,333 Debtors £6,500 Bank Loan £1,176 Total £170,500 Personnel Cost £73,000 Loan Repayment £2,100 Total £169,609 Therefore Closing Cash Balance is £891 Income Statement Liz & Sophie Income Statement, for the year ending 31stDec 2008 £ £ Cash Sale (Note: 6) 140,000 Account Sale (Note: 7) 35,000 175,000 Cost of Goods Sold Purchased Stock 100,000 Closing Stock (25,000) Personnel cost 73,000 Open Stock 15,000 (163,000) Gross Profit 12,000 Operating Expenses Depreciation –Assets (Note: 8) (2,300) (2,300) Operating Profit 9,700 Interest – Bank loan (Note: 9) (1,176) Profit before tax (or net reported profit) 8,524 Taxation (Note: 10) (2,120) Profit after tax 6,404 Dividends (0) Profit retained 6,404 Please Note: The brackets for outflows are listed as outflows. Assumptions: 1. Stock Value – Cost of the stocks have been reduced by £10k (£25k – 10K) therefore saving is reflected in the income statement. Background calculations for the Income Statement Note: 6 Cash Sales working: Sales Total for the year: £175,000 80% paid cash 80/100 * £175,000 = £140,000 Note: 7 Account Sales working Sales Total for the year: £175,000 20% pain non cash (on account) 20/100 * £175,000 = £35,000 Note: 8 Depreciation – Assets working: Fixed assets = £23,000 Yearly Depreciation = 1/10 Therefore 1/10 * £23,000 = £2,300 Note: 9 Interest – bank loan ... Download this essay in full now!Just upload at one of your essays to our database and instantly download your selection! Registration takes secondsOr you can download this essay for $2 immediately without registeringComments and reviewsReviews are written by members who have downloaded the essay No comments yet. If you download the essay you can review it afterwards. |
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