Cash flow statement

Miss Dazy
Miss Dazy Registered Posts: 34 Regular contributor ⭐
How do you approach the producing a cash flow statement (for 3 months) when information is limited.

You are given the opening (£4,000) and closing cash balances (£33,000).

However prior to the period £15,000 is owed by debtors and at the end of month 2 debtors now owe £40,000 however no indication is given of debtors terms.

Sales are £24,000 (month 1) £26,000 (month 2) and £27,000 (month 3)

In the notes it says capital payments have been made but no indication of the amount has been given.

Not registered?

Register to create your free account, talk to AAT members and start your own discussions.

Comments

  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
    Miss Dazy wrote: »
    How do you approach the producing a cash flow statement (for 3 months) when information is limited.

    You are given the opening (£4,000) and closing cash balances (£33,000).

    However prior to the period £15,000 is owed by debtors and at the end of month 2 debtors now owe £40,000 however no indication is given of debtors terms.

    Sales are £24,000 (month 1) £26,000 (month 2) and £27,000 (month 3)

    In the notes it says capital payments have been made but no indication of the amount has been given.

    first workout the net cash inflow for the 3 months

    o/debtors plus 3 months sales less c/debtors.

    now you can work out the net cash out flow for the 3 months by:

    o/bank bal plus 3 months net cash inflow less c/bank balance.

    You won'tbe able to do a 3 individual cash flow statement but you can now produce a 3 month combined cash flow

    opening bank bal
    plus net cash inflow
    less net cash outflow
    equals c/bank balance
  • Miss Dazy
    Miss Dazy Registered Posts: 34 Regular contributor ⭐
    could you just clarify this:

    now you can work out the net cash out flow for the 3 months by:

    o/bank bal plus 3 months net cash inflow less c/bank balance.


    as i am still not arriving at the £33,000 closing cash balance
  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
    cash inflow = 4+24+26+27-33=48

    cash outflow = 4+48-33=19

    cash flow

    o/bank bal.................................... 4
    plus cash inflow ...........................48
    less cash outflow ........................-19

    equals closing bank balance
    33

Not registered?

Register to create your free account, talk to AAT members and start your own discussions.
Privacy Policy