Answer question c only thanks
ANSWER ALL FOUR QUESTIONS: Question 1: The following information has been extracted from the draft financial statements of Bradford Ltd for the year ended 31 October 2020. All figures are expressed in '000s. Income statement for the year ended to 31 October 2020 Sales 106 Cost of sales (14) 92 (12) Gross profit Less: Expenses Operating profit Interest expense Interest income 80 (4) 3 Loss on disposal of non-current asset (9) Profit before taxation 70 Taxation (36) Profit after taxation 34 Balance sheet as at: 31 October 2020 31 October 2019 Non-current assets 1,650 1.240 Current assets 470 165 Inventory Trade receivables 188 201 Cash at bank 220 0 Total assets 2,528 1,606 Current liabilities Bank overdraft 0 50 860 406 284 356 Trade payables Non-current liabilities Long-term bank loan Equity Share capital (1) Share premium Other reserves Total equity and liability 526 422 375 178 483 194 2,528 1,606 Page 3 of 12 AFE 5008-B Financial Accounting Assignment Additional information: 1. Accumulated depreciation at the start of the year amounted to 20,000, and the closing depreciation provision stood at 50,000. 2. During the financial year, there was no revaluation on the Non-current Assets. 3. Interest and Taxation balance 2020 2019 Interest 24,000 32,000 Taxation 66,000 38,000 4. Bradford Ltd has received the dividend of 78,000 and paid the dividend of 33,000 to shareholders. 5. The historical cost of the non-current asset has been sold is 54,000. Depreciation which had been charged on the assets sold in the year totalled 10,000. 6. The historical cost of the non-current assets at the start of the year was 1,550,000. The total historical cost of non-current assets on 31 October 2020 was 1,750,000. You Are Required To: a. Use the indirect method to prepare a cash flow statement for the year ending 31 October 2020 in accordance with IAS 7. (16 Marks) b. During the reporting period, Bradford Ltd purchased 6% of the ordinary shares of Edge Hill, a public limited company. The share price of Edge Hill has risen considerably over the year and the fair value of the shares at the reporting date is 9 million. Edge Hill is listed on a stock exchange, and so Bradford Ltd can sell the shares quickly if it experiences short-term cash flow shortages. The finance director has included this investment at 9 million as part of 'cash and cash equivalents in the statement of cash flows. Discuss this accounting treatment in accordance with IAS 7. (6 Marks) c. Briefly comment on the cash position of Bradford Ltd. (3 Marks) [Total 25 Marks]
