Problem 70 (amended) Dolente Ltd is a small company which designs, manufactures and sells innovative electronic instruments. The directors of the company have discussed the financial statements prepared for the year ended 31" March 2020 and have made the following remarks. "We are surprised to see that we have a loss for the year as our bank balance seems to be healthy and has increased from the 2019 figure". The following are the financial statements of Dolente Ltd for the two years ended 31 March 2020. 2020 2019 Statement of Financial Position as at 31st March 000 000 000 000 Non current assets Tangible 862 820 Intangible 996 128 Current assets Inventories Trade debtors Prepayments Bank 1.004 1.050 1.998 Total Assets 2.000 Liabilities Creditors falling due within 1 year 820 Creditors falling due after 1 year Loans 1262 1246 Equity and reserves Ordinary shares of 1 each Share premium Retained earnings 252 738 2.000 Total Liabilities and Equity 1.998 Income Statement for the year ended 31" March 2020 000 Turnover 2,480 Cost of sales (2.004) Gross profit 476 Distribution costs (290) Administrative expenses Operating profit Interest payable Exceptional items Loss before taxation Taxation Loss for the year The following further information is available: (1) Tangible non-current assets: Cost Accumulated 000 000 As at 19 April 2019 1,242 Additions, at cost Disposals Depreciation for the year (RB) As at 31" March 2020 1,346 862 The assets were sold for cash proceeds of 10,000. Any profit or loss arising is included in the operating profit for the year. (2) Intangible non-current assets: These are patents on innovative electronic instruments. 000 As at 1st April 2019 Purchases Amortization (in operating profit) Exceptional write down As at 31" March 2020 134 (3) Prepayments all relate to expenses charged against operating profits. (4) Creditors falling due within one year 2020 2019 E000 Trade creditors 650 Accrued interest Taxation 820 Required: (a) Prepare a cash flow statement for Dolente Ltd for the year ended 31 March 2020. (b) Using the information provided by the cash flow statement, comment on the remarks of the directors on the results for the year (120-170 words at least). Problem 70 (amended) Dolente Ltd is a small company which designs, manufactures and sells innovative electronic instruments. The directors of the company have discussed the financial statements prepared for the year ended 31" March 2020 and have made the following remarks. "We are surprised to see that we have a loss for the year as our bank balance seems to be healthy and has increased from the 2019 figure". The following are the financial statements of Dolente Ltd for the two years ended 31 March 2020. 2020 2019 Statement of Financial Position as at 31st March 000 000 000 000 Non current assets Tangible 862 820 Intangible 996 128 Current assets Inventories Trade debtors Prepayments Bank 1.004 1.050 1.998 Total Assets 2.000 Liabilities Creditors falling due within 1 year 820 Creditors falling due after 1 year Loans 1262 1246 Equity and reserves Ordinary shares of 1 each Share premium Retained earnings 252 738 2.000 Total Liabilities and Equity 1.998 Income Statement for the year ended 31" March 2020 000 Turnover 2,480 Cost of sales (2.004) Gross profit 476 Distribution costs (290) Administrative expenses Operating profit Interest payable Exceptional items Loss before taxation Taxation Loss for the year The following further information is available: (1) Tangible non-current assets: Cost Accumulated 000 000 As at 19 April 2019 1,242 Additions, at cost Disposals Depreciation for the year (RB) As at 31" March 2020 1,346 862 The assets were sold for cash proceeds of 10,000. Any profit or loss arising is included in the operating profit for the year. (2) Intangible non-current assets: These are patents on innovative electronic instruments. 000 As at 1st April 2019 Purchases Amortization (in operating profit) Exceptional write down As at 31" March 2020 134 (3) Prepayments all relate to expenses charged against operating profits. (4) Creditors falling due within one year 2020 2019 E000 Trade creditors 650 Accrued interest Taxation 820 Required: (a) Prepare a cash flow statement for Dolente Ltd for the year ended 31 March 2020. (b) Using the information provided by the cash flow statement, comment on the remarks of the directors on the results for the year (120-170 words at least)