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Cash Flow Practice Questions

The document presents practice questions for preparing cash flow statements using both the indirect and direct methods. It provides specific financial data for two companies, Mabhida Traders and Bophelo Ltd, and requires the preparation of cash flows from operating activities sections. The focus is on understanding the adjustments needed for the indirect method and the direct cash inflows and outflows for the direct method.

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33 views1 page

Cash Flow Practice Questions

The document presents practice questions for preparing cash flow statements using both the indirect and direct methods. It provides specific financial data for two companies, Mabhida Traders and Bophelo Ltd, and requires the preparation of cash flows from operating activities sections. The focus is on understanding the adjustments needed for the indirect method and the direct cash inflows and outflows for the direct method.

Uploaded by

thobekadlamini940
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Cash Flow Statement Practice Questions

Question 1: Indirect Method


You are given the following information for Mabhida Traders:

- Net profit before tax: R150,000


- Depreciation expense: R20,000
- Bad debt expense: R5,000
- Increase in trade receivables: R15,000
- Decrease in inventory: R8,000
- Interest paid: R10,000
- Bad debts recovered: R3,000
- Income tax paid: R25,000

REQUIRED:
Prepare the cash flows from operating activities section using the indirect method.

Question 2: Direct Method


From the records of Bophelo Ltd, you are given the following cash information:

- Cash received from customers: R300,000


- Cash paid to suppliers: R180,000
- Cash paid for salaries: R40,000
- Interest paid: R5,000
- Income tax paid: R10,000
- Bad debts recovered: R6,000

REQUIRED:
Prepare the cash flows from operating activities section using the direct method.

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