The following information is available for Marston Limited. The balance in the bank account of the business 1 January 2021 was £30,000 overdrawn. During January 2021 the following transactions took place: 1. Bought Inventory for £12,000 cash 2. Sold Inventory for £27,000 cash 3. £7,000 was paid for rent in the year 4. A loan of £30,000 was taken out 5. Paid HMRC £6,000 corporation tax 6. New shares for £100,000 were issued 7. Half of the loan was repaid £15,000 8. Motor Vehicle was purchased for £1,500 9. Land was purchased for £60,000 10. Consultancy fees of £17,000 was paid 11. Interest expense of £3,000 was paid on loan Required: a. Prepare a statement of cashflow for Marston Limited for the month ended 31 January 2021, including reconciliation between opening, and closing bank balance.   b. outline what it tells the managers of Marston Limited

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following information is available for Marston Limited. The balance in the bank account of the
business 1 January 2021 was £30,000 overdrawn. During January 2021 the following transactions
took place:
1. Bought Inventory for £12,000 cash
2. Sold Inventory for £27,000 cash
3. £7,000 was paid for rent in the year
4. A loan of £30,000 was taken out
5. Paid HMRC £6,000 corporation tax
6. New shares for £100,000 were issued
7. Half of the loan was repaid £15,000
8. Motor Vehicle was purchased for £1,500
9. Land was purchased for £60,000
10. Consultancy fees of £17,000 was paid
11. Interest expense of £3,000 was paid on loan
Required:
a. Prepare a statement of cashflow for Marston Limited for the month ended 31 January 2021,
including reconciliation between opening, and closing bank balance.
 
b. outline what it tells the managers of Marston Limited
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