Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Read Source A1 from the Insert.
(a)[3]

State how useful a statement of cash flows is to potential shareholders.

(b)[5]

Calculate the profit from operations in the year ended 31 December 2019.

(c)[7]

Prepare an extract from the statement of cash flows for the year ended 31 December 2019, showing the net cash from or used in operating activities.

(d(i))[3]

Prepare an extract from the statement of cash flows for the year ended 31 December 2019, showing net cash from or used in operating activities.

(d(ii))[2]

Prepare an extract from the statement of cash flows for the year ended 31 December 2019, showing the net cash from or used in financing activities.

(e)[5]

Discuss whether it would be appropriate for P plc to distribute cash dividends to shareholders in 2020. Justify your answer.

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