Consider the following:

Further information 1 The dividend paid during Year 2 was £25m. The retained earnings increased by £77m profit of the period and decreased by the amount of the dividend, £25m.
2 During Year 2 the company acquired property, plant and equipment costing £94m.
3 During Year 2 the company sold for scrap property, plant and equipment that had an original cost of £19m and accumulated depreciation of £9m. The proceeds of disposal were £2m.
4 Investments were sold during the year for cash proceeds of £30m. There were no purchases of investments.
Required 1 Prepare a statement of cash flows using

(a) the direct method and

(b) the indirect method of calculating operating cash flow.
2 Write a comment on the cash flow of the period.

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Revenue Cost of sales Gross profit Investment income - interest received Loss on disposal of equipment Depreciation Administrative and selling expenses Operating profit before interest Interest expense Profit after deducting interest Taxation Profit after tax m 320 (143) 177 5 (8) (39) (13) 122 (6) 116 (39) 77