1. Compute the profit for the period. 2. Compute cash flow from operations 3. Why is cash flow from operations different from profit of the period?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Problem 4-1
The following details are obtained from the accounts book of a trading
company.
Extract from the Accounts Book of Cosmo Trading Company
Opening stock
Purchases
Sales
Closing stock
40
200
220
60
(In millions)
Opening receivables
Opening payables
Closing receivables
Closing payables
9828
40
30
Required
1. Compute the profit for the period.
2. Compute cash flow from operations
3. Why is cash flow from operations different from profit of the period?
70
50
Transcribed Image Text:Problem 4-1 The following details are obtained from the accounts book of a trading company. Extract from the Accounts Book of Cosmo Trading Company Opening stock Purchases Sales Closing stock 40 200 220 60 (In millions) Opening receivables Opening payables Closing receivables Closing payables 9828 40 30 Required 1. Compute the profit for the period. 2. Compute cash flow from operations 3. Why is cash flow from operations different from profit of the period? 70 50
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