\begin{tabular}{|c|c|c|c|c|}

\hline & \begin{tabular}{l}

Land \& \\

buildings \\

£000

\end{tabular} & \begin{tabular}{l}

Machinery \\

$£ 000$

\end{tabular} & \begin{tabular}{l}

Fixtures \\

\& fittings \\

$£ 000$

\end{tabular} & \begin{tabular}{l}

Total \\

$£ 000$

\end{tabular} \\

\hline \multicolumn{5}{|l|}{ Non-current assets } \\

\hline \multicolumn{5}{|l|}{ Cost or valuation: } \\

\hline At 31 December 2011 & 830 & 470 & 197 & 1,497 \\

\hline Additions & - & 43 & 55 & 98 \\

\hline Disposals & - & $(18)$ & - & (18) \\

\hline Adjustment on revaluation & 70 & $=$ & - & 70 \\

\hline At 31 December 2012 & $\underline{\underline{900}}$ & $\underline{\underline{495}}$ & $\underline{\underline{252}}$ & $\underline{\underline{1,647}}$ \\

\hline \multicolumn{5}{|l|}{ Depreciation } \\

\hline At 31 December 2011 & (90) & $(270)$ & $(180)$ & (540) \\

\hline Charge for year & (10) & $(56)$ & (8) & (74) \\

\hline Disposals & - & 12 & - & 12 \\

\hline Adjustment on revaluation & 100 & - & _ & 100 \\

\hline At 31 December 2012 & $\underline{\underline{0}}$ & (314) & (188) & $(502)$ \\

\hline \multicolumn{5}{|l|}{ Net book value } \\

\hline At 31 December 2012 & -900 & $\underline{\underline{181}}$ & $\underline{\underline{64}}$ & $\underline{\underline{1,145}}$ \\

\hline At 31 December 2011 & $\overline{740}$ & 200 & 17 & 957 \\

\hline

\end{tabular}

(a) You are required to prepare a statement of cash flows for $V$ Ltd for the year ended 31 December 2012 in accordance with the requirements of IAS 7.

(b) It has been suggested that the management of long-term profitability is more important than short-term cash flow. Explain why this might be so.

(Chartered Institute of Management Accountants)