20.2 The balance sheets of Duncan Ltd are summarised below:

As at As at 31.12.X5 31.12.X6

£000

£000

£000

£000 Fixed assets Land and buildings 1,980 1,540 Plant and machinery 205 230 Less: Depreciation 104 101 110 120 2,081 1,660 Current assets Debtors 1,000 1,050 Less: Current liabilities Creditors 581 601 Bank overdraft 1,100 104 Net current assets

(681)

345 1,400 2,005 Share capital and reserves Ordinary share capital 1,000 1,400 Profit and loss account 400 605 1,400 2,005 In the year to 31 December 20X6 machines were purchased at a cost of £55,000 and some machines (with a net book value of £10,000) were sold for a profit of £5,000 above their net hook value. Also, depreciation of £26,000 was provided for during the year.
Required:

(a) Prepare a cash flow statement for Duncan Ltd for the year ended 31 December 20X6.

(b) Comment on the major changes which have occurred.