The following Balance Sheets of financial positions for the year ended 31st December 2020 and 2021 have been prepared for Boris Limited.
Statement of financial positions at: 31.12.21 31.12.20
£ £ £ £
Fixed Assets
Plant and machinery at cost 53,000 53,000
Less: Depreciation (11,000) (9,000)
42,000 44,000
Investments at cost – 18,000
Current assets
Inventory 33,000 24,000
Trade receivables 27,000 18,000
Cash – 8,000
60,000 50,000
102,000 112,000
Capital and reserves
Ordinary share capital 50,000 50,000
Share premium account 9,000 9,000
Retained earnings 12,000 8,000
Shareholders’ funds 71,000 67,000
Long-term liabilities
Loans – 27,000
Current liabilities
Trade payables 22,000 18,000
Bank overdraft 9,000 31,000
102,000 112,000
Additional information:
There were no purchases or sales of plant and machinery during the year.
Required
1. Mr Boris has asked you to prepare Boris Limited’s statement of cash flows for the year ended 31st December 2021. (18 Marks)
2. Write a short memo to Mr Boris explaining the findings of your statement of cash flow. (7 Marks)
