17. Hatton plc's Income Statement for the year ended 31 December 2020 and statements of financial position at 31 December 2019 and 2020 were as follows: Hatton Limited Statement of Financial Position 2019 2020 Comprehensive Income Statement for the years ended 31 December 2020 Operating profit 56,000 Investment income 114,000 Interest expense (24.000) Net profit for the year 146,000 Less: corporation tax (61,000) Profit after tax 85,000 Non Current Assets Plant & equipment @ cost Less accumulated depreciation 637,100 (297,500) 767,300 (321,400) Net book value Trade investments at cost 339,600 106,000 445,900 106,000 445,600 EEEEE 551,900 EEEE The following additional information is provided: i. On 1 January 2020 20,000 shares were issued for cash, the shares were issued for 2.50 each Current assets Inventory Receivables Bank 230,200 135,800 260,100 196,400 9,300 ii. During 2020 a dividend of 60,000 was paid. iii. During 2020 plant & equipment which had originally cost 65,200 was sold for 17,900. Accumulated depreciation on the disposals amounted to 37,700. The loss on disposal had been deducted in calculating the net profit for the year of 146,000. 465,800 366,000 EEEEE 811.600 ===== TOTAL ASSETS 1,017.700 iv. Investment income for 2020 comprises the following: Equity Ordinary shares 1 Share premium Profit & loss account 200,000 220,000 30,000 339,000 Dividends receivable Interest receivable 78,000 36,000 320,000 520,000 ===== 589,000 =EEEEE Required: Non-current Liabilities Bank loan 200,000 (a) Prepare a Statement of Cash Flows for Hatton plc for the year ended 31 December 2020 in accordance with IAS 7 Statement of Cash Flow.' 98,700 4,000 Current Liabilities Trade payables Interest accrual Corporation tax Dividends Bank overdraft 90.600 6.000 64.000 60,000 71,000 60,000 (b) What are the advantages of the of the indirect method of the cash flow statement? Critically discuss this providing examples. 66,000 291,600 ====== 228.700 ====== TOATL EQUITY AND LIABILITIES 811.600 1.017.700 17. Hatton plc's Income Statement for the year ended 31 December 2020 and statements of financial position at 31 December 2019 and 2020 were as follows: Hatton Limited Statement of Financial Position 2019 2020 Comprehensive Income Statement for the years ended 31 December 2020 Operating profit 56,000 Investment income 114,000 Interest expense (24.000) Net profit for the year 146,000 Less: corporation tax (61,000) Profit after tax 85,000 Non Current Assets Plant & equipment @ cost Less accumulated depreciation 637,100 (297,500) 767,300 (321,400) Net book value Trade investments at cost 339,600 106,000 445,900 106,000 445,600 EEEEE 551,900 EEEE The following additional information is provided: i. On 1 January 2020 20,000 shares were issued for cash, the shares were issued for 2.50 each Current assets Inventory Receivables Bank 230,200 135,800 260,100 196,400 9,300 ii. During 2020 a dividend of 60,000 was paid. iii. During 2020 plant & equipment which had originally cost 65,200 was sold for 17,900. Accumulated depreciation on the disposals amounted to 37,700. The loss on disposal had been deducted in calculating the net profit for the year of 146,000. 465,800 366,000 EEEEE 811.600 ===== TOTAL ASSETS 1,017.700 iv. Investment income for 2020 comprises the following: Equity Ordinary shares 1 Share premium Profit & loss account 200,000 220,000 30,000 339,000 Dividends receivable Interest receivable 78,000 36,000 320,000 520,000 ===== 589,000 =EEEEE Required: Non-current Liabilities Bank loan 200,000 (a) Prepare a Statement of Cash Flows for Hatton plc for the year ended 31 December 2020 in accordance with IAS 7 Statement of Cash Flow.' 98,700 4,000 Current Liabilities Trade payables Interest accrual Corporation tax Dividends Bank overdraft 90.600 6.000 64.000 60,000 71,000 60,000 (b) What are the advantages of the of the indirect method of the cash flow statement? Critically discuss this providing examples. 66,000 291,600 ====== 228.700 ====== TOATL EQUITY AND LIABILITIES 811.600 1.017.700