Self-test The balance sheet of Peter Paul plc as at 30 June 2009 is given below, together with a summary profit and loss account for the year. You are required to prepare the cash flow statement for inclusion with the annual report.

Balance sheet as at 30 June 2008 2009 Fixed assets Land and buildings at cost 260 260 less Accumulated depreciation 60 200 64 196 Plant and machinery at cost 140 160 less Accumulated depreciation 34 106 46 114 306 310 Current assets Stock 50 48 Debtors 32 58 Short-term investments 10 40 Cash at bank 6 14 98 160 Creditors: Amounts due in less than one year Trade creditors 38 54 Taxation 30 24 Dividends 24 28 92 106 Net current assets 6 54 312 364 Creditors: Amounts due in more than one year 10% debentures 40 80 272 284 Financed by:

Share capital 200 200 Revenue reserves 72 84 272 284 Profit and loss account for the year ended 30 June 2009 Sales 346 less Cost of sales 192 Gross profit 154 less Expenses 48 Depreciation – buildings 4

– Plant and machinery 32 Loss on sale of fixed asset 2 86 Net operating profit 68 Interest receivable 4 72 Interest payable 8 Profit before tax 64 Corporation tax 24 Net profit after tax 40 Proposed dividend 28 Net profit unappropriated 12 Note: During the year plant and machinery costing £30m, with accumulated depreciation of £20m, was sold for £8m.