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MC Question 11

Top Trades Co has been trading for a number of years and is currently going through a period of expansion.

An extract from the statement of cash flows for the year ended 31 December 20X7 for Top Trades Co is presented as
follows:

$’000
Net cash from operating activities 995
Net cash used in investing activities (540)
Net cash used in financing activities (200)
Net increase in cash and cash equivalents (255)
Cash and cash equivalents at the beginning of the period (200)
Cash and cash equivalents at the end of the period (455)

Which of the following statements is correct according to the extract of Top Trades Co’s statement of cash flows?

A     The company has good working capital management
B     Net cash generated from financing activities has been used to fund the additions to non-current assets
C     Net cash generated from operating activities has been used to fund the additions to non-current assets
D     Existing non-current assets have been sold to cover the cost of the additions to non-current assets