An extract from the profit and loss account of Delta Ltd for the year to 31 May 1999 is given below, together with the company's balance sheets as at 31 May 1998 and 31 May 1999.

Additional information:

1. The 11% debentures were issued on 1 December 1998 and the first halfyear's interest was paid on 31 May 1999.
2. Bank overdraft interest paid during the year amounted to £1,320.
3. Dividends received for the year were £930.
4. No investments were sold during the year.
5. During the year, plant and machinery which had cost the company £22,000 was sold for £7,000. The accumulated depreciation on this plant and machinery was £16,230.
6. Proposed dividends at 31 May 1998 and 31 May 1999 consist entirely of ordinary dividends.
7. The Treasury bills rank as liquid resources for FRS1 purposes.
Required:
Prepare a cash flow statement for the year to 31 May 1999 in accordance with the requirements of FRS1 (using the indirect method) together with the accompanying reconciliations and notes.

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Delta Ltd Profit and loss account (extract) for the year to 31 May 1999 Profit on ordinary activities before taxation 205,600 Tax on profit on ordinary activities 46,980 Profit on ordinary activities after taxation 158,620 Retained profits brought forward 19,990 178,610 Transfer to general reserve 90,000 Dividends: Paid preference shares 5,000 - ordinary shares 45,000 Proposed ordinary dividend 10,000 150,000 Retained profits carried forward 28,610