a) Prepare the Statement of Cash Flows for the year ended 31 December 2012 using the Indirect Method. Show all workings.

b ) Analyse and comment on Tagore Ltds cash flows for the year ended 31 December 2012.

Tagore Ltd is a public listed company. Its summarised financial statements for the years ended 31 December 2012 and the comparative figures are shown below. Statements of Profit or Loss for the years ended 31 December: 2011 $ 1,780,000 (1.052.000) 728,000 Revenue Cost of sales Gross profit Gain on sale of investments Interest income Operating expenses Profits from operations Finance costs Profit before tax Income tax expense Profit for the year 2012 $ 2,500,000 (1,690,000) 810,000 120,000 20,000 (575,000) 375,000 (40.000) 335,000 (65,000 270.000 15,000 (330,000) 413,000 (5,000 408,000 (110,000) 298,000 2011 $ $ Statements of Financial Position as at 31 December: 2012 S $ Non-current assets Property, plant and equipment (NBV) 950,000 Investment at cost 260,000 1,210,000 Current assets Bank 0 Prepayments 20,000 Trade receivables 155,000 Inventory 220,000 395,000 Total assets 1,605,000 610,000 105,000 715,000 100,000 5,000 90,000 110,000 305,000 1,020,000 270,000 Shareholders' equity Ordinary share capital Revaluation reserve Retained earnings 370,000 80,000 355,000 805,000 275,000 545,000 Non-current liabilities 10% secured loan notes 400,000 205,000 Current liabilities Bank overdraft Trade payables Current tax payable Total equity and liabilities 110,000 220,000 70.000 0 150,000 120,000 400,000 1,605,000 270,000 1,020,000 Additional Information: (1) The depreciation on property, plant & equipment of $140,000 was charged to the Statement of Profit or Loss (included in operating expenses) before deriving the net profit for the year ended 31 December 2012. (2) There were no disposal of Property, plant and equipment, although there was a revaluation on property made during the year 2012. (3) All purchases and sales were made on credit. (4) On 1 August 2012, the company made a bonus issue of $20,000 to the ordinary shareholders. (5) During the year 2012, new investments of $200,000 were purchased after selling off some existing investments at a profit of $120,000. (6) Dividends declared were paid out immediately. (7) There were no interest receivable nor finance cost payable