Operating cash, interest paid and corporation tax

Operating cash, interest paid and corporation tax

1) The following balance sheet and income statement extracts pertain to Dita Ltd.
Dita Ltd Balance sheet extracts as at:
31/12/20X8 31/12/20X7
Current assets:
Inventory 235,000 250,000
Receivables 56,300 58,500
Prepayments 1,500 1,200
Current liabilities:
Payables 34,700 28,450
Accruals 1,550 1,000
Dita Ltd Income statement extract for the period ended 31 December 20X8
Sales revenue 375,000
Less: cost of sales (230,000)
Gross profit 145,000
Operating expenses* (62,500)
Operating profit 82,500
*Operating expenses include ÂŁ14,500 depreciation expense.
Calculate cash generated from operations during 20X8.
2) An extract from Clemence Ltd’s income statement for the period ended 31 December 2011 is as follows.

Operating cash, interest paid and corporation tax

Clemence Ltd income statement extract
Sales revenue 5,500,000
Less: Cost of sales (2,500,000)
Gross profit 3,000,000
Less: Operating expenses (1,350,000)
Operating profit 1,650,000
Less: Finance cost (interest charge) (230,000)
Profit before tax 1,420,000
Less: Corporation tax (480,000)
Profit for the period 940,000
The opening and closing balances on the interest payable and corporation tax payable accounts were as follows.
31 Dec 2011 1 Jan 2011
Interest payable 225,000 240,000
Corporation tax payable 420,000 410,000
Total 645,000 650,000
Calculate interest paid and corporation tax paid during 2011.

 

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