Question 1 (39 marks) Apricot Limited is incorporated in Hong Kong. The draft financial statements for the year ended 31 December 2020 are as follows: Statement of profit or loss and other comprehensive income for the year ended 31 December 2020 Revenue Cost of sales Gross profits Administration expense Distribution expense Profits before tax Taxation Profits for the year (Note 1) Other comprehensive income Revaluation of property, plant and equipment $000 8,800 (4,000) 4,800 (700) (500) 3,600 (900) 2,700 3,500 Total comprehensive income for the year 6,200 Statement of financial position as at 31 December 2020 2020 $000 2019 $000 Non-current assets Property, plant and equipment Prepaid land lease payment Intangibles assets Investment properties Certificate of deposit 17,500 1,400 2,800 6,500 4,200 32,400 11,500 2,100 2,600 5,200 3,800 25,200 Current assets Inventories Trade receivables Marketable securities Interest receivables Cash and bank Total assets 6,100 5,500 5,800 480 1,400 51,680 4,500 3,500 4,800 350 1,000 39,350 Equity and reserves Share capital Retained profits Other reserves 18,800 5,400 6,000 30,200 11,000 3,500 2,500 17,000 Current liabilities Trade payables Other payables Interest payables Tax payables Bank overdraft 2,400 1,110 3,100 2,200 670 3,800 4,500 2,800 1,750 500 Non-current liabilities Non-current liabilities Bank loans Total equity and liabilities 12,000 51,680 9,000 39,350 The following information is available: 1. Profit for the year has been arrived at after charging (crediting): Auditor's remuneration Depreciation charge Directors' remuneration Advertising expenses Impairment loss on accounts receivables Inventories write down Impairment loss on intangible assets Gain on sale of investment properties Gain on sale of property, plant and equipment Finance cost Interest income Release of prepaid lease rental payments Rental expense Change in fair value of investment properties $000 400 1,100 1,600 700 100 200 700 (700) (200) 400 (150) 700 900 (600) 2. The certificate of deposit was a five-year certificate of deposit that paid 5% compounded semi-annually with the maturity date 31 December 2023. 3. 600,000 ordinary shares were issued during the year at $13 per share. 4. During the year, Apricot Limited sold a delivery truck for $1,600,000. In the books of Apricot Limited, information about the truck is as follows: Cost $2,500,000 Accumulated depreciation $1,100,000 5. The marketable securities, acquired in November 2020, were highly liquid and were due to mature on 1 February 2021. 6. One of the investment properties with a carrying amount of $4,200,000 was sold for $4,900,000. The investment properties fair value had increased by $600,000 at year end. 7. It was Apricot Limited's policy to perform the impairment loss test on its assets at year end. Impairment losses, if any, were written off immediately as expenses. Required: Prepare the statement of cash flows for the year ended 31 December 2020, using the indirect method to determine the cash flows from operating activities, for Apricot Limited, beginning with profit before tax. All figures should be rounded to the nearest thousand dollars
