61 The fllowing are extracts from the financial statements o

61. The fllowing are extracts from the financial statements of a company for the two years ended 31 December 2015 and 2016. Statement of financial position as at 31 December Years Invento Trade receivbles Current asset investment Cash and bank balances Bank overdraft Trade payables Non current assets Non current liabilities Issued 1$ Ordinary share 2015 490 375 300 25 200 1418 1536 2016 365 525 340 76 450 910 2728 300 S000 5500 The current asset investments are h ghly liquid and are payable on demand. The ordinary shares were issued at nominal value. The income statement for the year ended 31 December 2016 shows an operating profit of E2,500,000 after charging depreciation of £750,000 and a profit on dispcsal of a non-current asset of E32,0C0. The change in the company\'s cash and cash equivalents for the year ended 31 December 2016 was:?

Solution

Change in cash & cash equivalents in year 2016.

Decrease in inventory =. $125

Increase in debtors. =. ($150)

Increase in cash. =. $ 51

Increase in current investment=. ($40)

Increase in bank overdraft =. $250

Increase in trade payable =. $1310

Increase in non current assets = ($1192)

Increase in non current liabilities = $300

Profit on sales of non current assets= $32

Increase in share capital =. $ 500

Change in cash & cash equivalents = $1211