A - FINANCIAL ACCOUNTING ANSWER ONE QUESTION FROM THIS SECTION (EITHER QUESTION 1 OR QUESTION 2) AND SHOW ALL YOUR WORKINGS Question 1 (a) Dinosaurus plc's statement of profit or loss for the year ended 30 June 2017 and statements of financial position as at 30 June 2016 and 30 June 2017 were as follows: Dianosaurus plc Statement of profit or loss for year ended 30 June 2017 Revenue Cost of sales 1,090,000 (105,000) Gross profit 985,000 General costs 141,000 Depreciation 177,000 Loss on disposal of machine 27,000 (345,000) Operating profit 640,000 Interest payable (228,000) Profit before tax 412,000 Dianosaurus plc Statement of financial position as at 30 June Non-current assets Machinery-cost Machinery- accumulated depreciation 2017 2016 2,394,000 2,340,000 (477,000) (336,000) 1,917,000 2,004,000 Current assets Inventory Trade receivables 46,000 30,000 114,000 87,000 Cash Current liabilities Trade payables Net current assets 72,000 84,000 232,000 201,000 (171,000) (138,000) 61,000 63,000 Non-current liabilities 10 year bank loan (300,000) (750,000) Net assets 1,678,000 1,317,000 Share capital 594,000 546,000 Retained profit at 30 June 2017 1,084,000 771,000 1,678,000 1,317,000 Additional information: During the year, dividends of 99,000 were paid and machinery costing 135,000 was acquired. Required: (i) Prepare the Statement of Cash Flows for the year ended 30 June 2017 for Dinosaurus plc. Use appropriate headings in your statement including cash flows from operations, cash flows from investing and cash flows from financing and show your workings. You do not need to provide the note of cash and cash equivalents. (ii) Comment briefly on the change in the cash balance over the year to 30 June 2017, explaining why cash has decreased. (iii) Advise the company on three actions it can take to increase its cash balances over the next year. (25 marks) (b) A business can be set up as a sole trader, a partnership or a company. Explain two advantages and disadvantages of each type of entity compared to the other types. (8 marks) TOTAL (33 marks)