Day: October 7, 2022

A company issued 10,000 £10 ordinary shares at a price of £20 each.

A month after the issue, the company used £156,000 of the proceeds to repay an 8% Debenture including six months’ accrued interest due.

The company prepared a cash flow statement just  after repayment of the Debenture.

What amount of net cash inflow will appear under the heading ‘Financing’ in the cash flow statement?

Select ONE answer:

1. £38,000
2. £44,000
3. £50,000
4. £56,000

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – £150,000 * 0.08 = £12,000 / 2 = £6,000 = = > £20 * 10,000 = £200,000 – £156,000 + £6,000
4. Not correct

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