Below are the financial statements of E$.$ Company LTD$.$

E$.$ Company LTD

INCOME STATEMENT FOR THE YEAR ENDED $31$ DECEMBER $2022$

$000$

Revenue $2,553$

Cost of Sales $(1,814)$

Gross Profit $739$

Other income: interest received $25$

Distribution costs $(125)$

Administrative expenses $(264)$

Finance costs $(75)$

Profit before tax $300$

Income tax expense $(140)$

Profit for the year $160\_$

E$.$ CO

STATEMENTS OF FINANCIAL POSITION AS AT $31$ DECEMBER $2022$

$20222021$

Assets $000000$

Non$-$current assets

Property, plant and equipment $380305$

Intangible assets $250200$

Investments $-25$

Current assets

Inventories $150102$

Receivables $390315$

Short term investments $50-$

Cash in hand $21$

Total assets $1,222948$

Equity and Liabilities

Equity

Share capital $($sh$\mathrm{.}1$ Ordinary shares$)200150$

Share premium account $160150$

Revaluation surplus $10091$

Retained earnings $260180$

Non$-$current liabilities

Long term loan $17050$

Current Liabilities

Trade payables $127119$

Bank overdraft $8598$

Taxation $120110$

Total equity and liabilities $1,222948$

The following is available.

$($a$)$ The proceeds of the sale of non$-$current asset investments amounted to sh$30,000.$

$($b$)$ Fixtures and fittings, with an original cost of sh$85,000$ and a net book value of sh$45,000$ were sold for sh$32,000$ during the year $($Reference to IAS $16)$

$($c$)$ The following information relates to property, plant and equipment

$31\mathrm{.}12\mathrm{.}202231\mathrm{.}12\mathrm{.}2021$

$000000$

Cost $720595$

Accumulated depreciation $340290$

Net book value $380305$

$($d$)$ The short$-$term investments are treated as part of cash in the company.

$($e$)$ Dividends of sh$80,000$ were paid during the year.

Required

Prepare a statement of cash flows for the year to $31$ December $2022.$

HINTS

This are the guidelines on the most important steps:

$1.$ On note $1$: the investments on the balance sheet in the year $2021$ has disappeared hence have been sold at sh$\mathrm{.}30,000.$

$2.$ On note two. Make a disposal account to know the profit made on the disposal of fixtures:

$3.$ On note $3.$ To get how much of assets that were purchase, make non$-$current asset account

Dr$.$ Cr$.$

Bal b$/$d $595000$ Disposed $($fixture$)85000$

Revaluation surplus $(100-91)90000$

Purchase $($bal$.$Fig$)201000$ Bal c$/$d $720,000$

$805000805000$

$4.$Also to get the amount that was supposed to be reported in the Income statement as depreciation: Make the provision for depreciation account.

$5.$Also note that the intangible assets in the balance sheet increased from $200,000$ to $250,000,$

$6.$The opening cash will be $($ cash $+$ investments $2021=0+1)-$ Bank overdraft $(98)=(97)$

$7.$The closing cash will be$($ cash $+$investments $2020=50+2)-$ Bank overdraft $(85)=(33)$

Increase in cash $64.$ Since the negative has reduced.