Cash flow statement

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Miss Dazy
Miss Dazy Registered Posts: 34 Regular contributor ⭐
in AAT Level 3 (Level 6 in Scotland)
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.

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  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
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    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 ⭐
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    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 🐘
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    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

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