Question1.
Preparation of a statement of cash flows
Kane plc's statement of P/L for the year ended 31 Dec 20X2 and SOFP at 31 Dec
20X1 and 31 Dec 20X2 were as follows.
Statement of profit or loss for the year ended 31 December 20X2
£'000
Revenue 720
Cost of sales (188)
Gross profit 532
Distribution costs (18)
Administrative expenses (94)
Profit from operations 420
Finance costs (28)
Profit before tax 392
Income tax expense (124)
Profit for the period 268
Kane plc - Statement of financial position as at 31 December
20X2 20X1
£'000 £'000 £'000 £'000
Non-current assets
Cost 1,596 1,560
Depreciation (318) 1,278 (224) 1,366
Current assets
Inventory 24 20
Trade receivables 66 50
Recoverable corporation tax 10 8
Bank 48 148 56 134
Total assets 1,426 1,470
EQUITY
Share capital 360 340
Share premium 36 24
Retained earnings 716 514
Non-current liabilities
Borrowings 200 500
Current liabilities
Trade payables 12 6
Taxation 102 114 86 92
TOTAL EQUITY &LIABILITIES 1,426 1,470
Additional Information
1. Dividends totalling £66,000 were paid during the year.
2. During the year, the company paid £90,000 for a new piece of machinery.
3. Included in the cost of sales is depreciation of £118,000. A loss on disposal of
£18,000 has been included in distribution costs.
Requirement
Prepare a statement of cash flows for Kane plc for the year ended 31 December
20X2 in accordance with the requirements of IAS 7.
