872 93 " * F 6 1.036 Question 2 The balance sheets of Capello Ltd as at 31 December 2020 and 2019 and a summary of the income statement for the year ended 31 December 2020 are as follows: Balance Sheets as at 31 December 2020 2019 $'000 $'000 Non-current (fixed) assets Land and buildings 800 596 Plant and machinery 294 276 1,094 Current assets Inventory (stock) 84 Trade receivables (Debtors) 86 74 Cash at bank 186 164 Total assets 1.280 Equity and liabilities Ordinary share capital Share premium 70 Revaluation reserve 100 Retained earnings 444 Total equity 644 Non-current liabilities Debentures 243 Current liabilities Trade payables (creditors) 153 Interest payable 10 Current tax payable 113 Bank overdraft 117 393 Total liabilities Total equity and liabilities 1.280 30 lila ato e laac 636 1.036 9 You are given the following information: (1) The income statement for the year ended 31 December 2020 includes the following items: $'000 Depreciation charge on plant and machinery 40 Interest charge 25 Tax charge Dividends paid 38 56 (2) During the year plant and machinery were disposed of for $15,000. These machines had a total original cost of $45,000 and had accumulated depreciation at the date of sale of $12,000. (3) During the year, a rights issue was made. Requirements: (a) Prepare a cash flow statement, for Capello Limited for the year ended 31 December 2020. (20 marks) (6) Discuss the advantages and disadvantages of such statements