(15 marks) QUESTION TWO Below are the statements of Financial Position for Kingdom Ltd as at 31 December, 2020 and 31 December, 2019 and the Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 December, 2020. 2020 2019 ASSETS GH'000 GH'000 Non-current assets Tangible assets 3,328 2724 Intangible assets 5,660 3268 8,988 5992 Current assets Inventory 2,476 2804 Receivables 2,336 1968 Investments 1,584 500 Cash 324 6,464 5596 Total assets 15,452 11588 68 2 EQUITY AND LIABILITIES Equity Equity shares (GH1) Revaluation surplus Retained earnings 2336 3.248 600 6,448 10,296 160 4840 7336 Non-current liabilities Provision for court case 5% Debentures 292 880 1,172 200 352 552 120 Current Liabilities Interest payable Bank overdraft Dividends payable Tax payable Trade payables 400 240 324 952 2,068 3,984 15,452 560 904 2116 3700 11588 Total equity and liabilities Statement of Profit or Loss and Other Comprehensive Income for year ended 31 December, 2020 GH'000 Revenue 7,044 Cost of sales and expenses 3,712) Operating profit 3,332 Interest charge (440) Profit before tax 2,892 Income tax expense (960) 1.932 Dividends (324) Profit for the year 1.608 Retained earnings b/f 4,840 Retained earnings of 6,448 i Additional Information: Intangible non-current assets represent deferred development expenditure. Amortisation in 2020 amounted to GH 172,000. Tangible non-current asset additions totaling GH800,000 were made. Proceeds from the sale of tangible non-current assets were GH6412,000, on which Kingdom Ltd suffered a loss of GH424,000, iii. iv. Investments include treasury bills of GH128,000 acquired during 2020. Kingdom Ltd sees these as cash equivalents. During the year Kingdom Ltd had a 1 for 4 bonus issue of shares, financed by capitalising part of the retained earnings account. In December 2020 there was a further issue at full market price. Required: Prepare a statement of Cash Flows for Kingdom Ltd for the year ended 31 December, 2020 in accordance with IAS 7. (15 marks) Cost of sales and expenses Operating profit Interest charge Profit before tax Income tax expense 4044 3.712) 3,332 (440) 2,892 (960) 1.932 (324) 1,608 4,840 6,448 Dividends Profit for the year Retained earnings b/f Retained earnings c/f Additional Information: i. Intangible non-current assets represent deferred development expenditure. Amortisation in 2020 amounted to GH172,000. Tangible non-current asset additions totaling GH800,000 were made. Proceeds from the sale of tangible non-current assets were GH4412,000, on which Kingdom Ltd suffered a loss of GH24.000. 3 111. iv. Investments include treasury bills of GH128,000 acquired during 2020. Kingdom Ltd sees these as cash equivalents. During the year Kingdom Ltd had a 1 for 4 bonus issue of shares, financed by capitalising part of the retained earnings account. In December 2020 there was a further issue at full market price. Required: Prepare a statement of Cash Flows for Kingdom Ltd for the year ended 31 December, 2020 in accordance with IAS 7. (15 marks)
