4

The Homer Double Glazing Company plc's balance sheets as at 31 December 19-1 and 19-2, and the profit and loss account for the year to 31 December 19-2 are as follows:

	as at 31 December 19-2 000 000		as at 31 December 19-1 000 000
Fixed assets:
Freehold property at valuation		1,000		850
Plant and machinery at cost	780		695
less provision for depreciation	320	460	280	415
Motor vehicles at cost	400		332
less provision for depreciation	185	215	170	162
Office computer equipment at cost	60		55
less provision for depreciation	30	30	28	27
		1,705		1,454
Current assets:
Stocks	250		222
Debtors	102		107
Short term investments	300		-
Cash at bank	54		75
	706		404
Creditors: amounts due within one year
Trade creditors	(45)		(68)
Taxation	(140)		(86)
Proposed dividends	(120)		(100)
Net current assets		401		150
Total assets less current liabilities		2,106		1,604
Creditors: amounts falling due after more than one year
10% Debenture stock		(100)		(150)
		2,006		1,454
Capital and reserves
Issued share capital		1,000		600
Share premium		30		210
Freehold property revaluation reserve		150		-
Asset replacement reserve		250		200
General reserve		400		300
Retained profit		176		144
		2,006		1,454

Profit and loss account (extract) for the year to 31 December 19-2

	000	000
Profit before tax		494
Taxation		(132)
Profit after tax		362
Transfer to asset replacement reserve	(50)
Transfer to general reserve	(100)
Dividends paid and proposed	(180)	(330)
Retained profit for the year		32
Retained profit brought forward from 31 December 19-1		144
		176

Notes

1. During the year to 31 December 19-2 the following transactions took place:

Plant and machinery which cost 120,000 and on which depreciation of 95,000 had been provided, was sold for 22,000

Motor vehicles which had cost 85,000 and which had a written down value of 15,000 at the date of sale were sold for 28,000.

(iii) Office computer equipment which had cost 10,000 and on which depredation of 5,000 had been provided was sold at a loss of 2,000.

2. During the year to 31 December 19-2 a bonus issue of shares was made on the basis of one bonus share for every three shares already held. This was done by using part of the share premium account. The company then made a rights issue on the basis of one share for each four held, the new shares being offered at a premium of 10p on each share.

3 There had been no additions to freehold property during the year to 31 December 19-2.

The 10% debenture stock is redeemable at par. The debenture stock redemption took place on 1 January 19-2

The short term investments are immediately realisable. Required

A cash flow statement for the year to 31 December 19-2 for The Homer Double Glazing Company plc.