MSIN0211 Financial Frameworks Workshop #1 Practice question
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MSIN0211 Financial Frameworks
Workshop #1 Practice question – LOOP Ltd.
Use the following information for LOOP Ltd to practice preparing a simple cash flow, income statement and balance sheet
LOOP Ltd…buys and resells loopy items... The first financial year saw the company:
1. Issue 100 ordinary shares with a nominal value of £2 at £2 for cash.
2. Obtain a £500 bank loan @ 10% annual interest
3. Pay annual rent for the year of £4
4. Buy equipment for £50 cash, to be used for 5 years, depreciated using straight line method.
5. Buy inventory on credit (on account) for £50; by end of year still owed £12 of that £50)
6. Sold on account/credit terms for £90, 75% of inventory bought; by end of year, account customers still owed £20 of that £90.
7. Paid various expenses totalling £6, all paid in cash.
8. Paid bank loan interest of £50, and calculated and paid tax bill of £30
9. Salaries totalled £100 but only £90 was paid by the end of the financial year.
10. Repaid £100 of the bank loan.
11. No dividends were issued.
Required:
Prepare cash flow and income (aka profit) statements for the year and year- end balance sheet (SoFP) for LOOP Ltd
2023-07-29