Question

PSA11.2 Prepare the operating activities section — direct and indirect methods.LO2, 3

The statement of profit or loss of Phillips Screwdrivers Ltd is presented here.

PHILLIPS SCREWDRIVERS LTD Statement of profit or loss for the year ended 31 March 2020
Sales		$6 900 000
Cost of sales
Beginning inventory	$1 900 000
Purchases	4 400 000
Goods available for sale	6 300 000
Ending inventory	1 600 000
Total cost of sales		4 700 000
Gross profit		2 200 000
Operating expenses
Selling expenses	450 000
Administrative expenses	600 000	1 050 000
Profit before tax		1 150 000
Tax expense		100 000
Profit		$1 050 00
Additional information: Accounts receivable decreased $300 000 during the year. Prepaid expenses increased $150 000 during the year. Accounts payable to suppliers of inventory decreased $300 000 during the year. Accrued expenses payable decreased $100 000 during the year. Administrative expenses include depreciation expense of $60 000. All tax expense was paid in cash. Required Prepare the operating activities section of the statement of cash flows for the year ended 31 March 2020 for Phillips Screwdrivers Ltd using the direct method.

Answer 1

	Phillips Screwdrivers Ltd
	Partial Statement of Cash Flows
	for the year ended 31 March 2020