Golden Bakery Ltd.

Statement of comprehensive Income

For the year ended December 31,2018.

	$000
Sales Cost of sales Gross profit Distribution cost Administration Operating profit Interest payable Profit before taxation Taxation Profit after taxation Retained earnings b/d Retained earnings c/d	66,746 (13,785) 52,961 (7,530) (2,516) 42,915 (1,177) 41,738 (9,857) 31,881 28,063 59,944

Golden Bakery Ltd.

Statement of Financial Position

As at December 31,2018

	2018	2017
	$000	$000
Non-current assets Cost Depreciation Current assets Inventory Trade receivables Cash Total assets Equity & liabilities Capital and reserves Share capital Share premium Retained earnings Non-current liabilities 6% Loan Note Current liabilities Trade payables Taxation Total liabilities	144,844 (27,433) 117,411 24,931 18,922 3,689 164,953 42,395 14,569 59,944 17,824 22,232 7,989 164,953	114,785 (26,319) 88,466 24,065 13,238 2,224 127,993 30,454 10,788 28,063 24,068 27,297 7,323 127,993

Additional information:

1. During the year ended December 31, 2018, the company sold a piece of equipment for $3,053,000 realising a profit of $1,540,000. There was no other disposal of non-current assets during the year.

2. Profit from operations is stated after charging depreciation of $5,862,000.

3. There were no amounts outstanding in respect of interest payable o receivable as at December 31, 2018 or 2017

4. There were no dividends paid or declared during the year.

Required:

1. Prepare a statement of cash flows for Golden Bakery Ltd for the year ended December 31, 2018 in accordance with the requirements of IAS 7 using the indirect method. Show all workings. (24 marks)
2. Explain THREE (3) reasons for the difference between the income statement profit and the cash flow. (6 marks)