Question 1: Statements of financial position for Thor Limited at 31 December 2021 and 31 December 2020 together with extracts from the statement of profit or loss for the year ended 31 December 2019 and relevant notes are presented below. 2021 2020 000 000 Assets Non-current assets Intangible assets: patents Property, plant and equipment 12,886 Investments 739 13,625 Current assets Inventory 2,650 Trade and other receivables 4,976 Cash and cash equivalents 1,542 9,168 Total assets 22,793 Current liabilities Borrowings Trade and other payables 5,943 Current taxation 450 19,577 1,244 21,271 2,385 5,423 7,808 29,079 150 6,479 1,600 8,229 | | | 5,943 Non-current liabilities Borrowings Provisions Total liabilities Net assets Equity Share capital Share premium Retained earnings [SEE NEXT PAGE] 2 2,000 600 2,600 10,829 18,250 2,000 4,000 12,250 18,250 7,000 500 7,500 13,443 9,350 1,500 2,000 5,850 9,350 Thor Limited: statement of profit or loss (extract) for the year ended 31 December 2021 000 Operating profit Finance income Finance expense Profit before tax Income tax Profit for the year Notes to the financial statements On 1 July 2021, Thor Limited paid 500,000 to acquire new patents. Patents are amortised on a straight line basis over five years. Thor Limited's share capital is made up of ordinary shares with a par value of 50 pence per share. On 1 October 2021, Thor Limited issued 1 million ordinary shares at a premium of 2 per share for cash. Trade and other receivables at 31 December 2020 include income tax recoverable of 600,000. This income tax recoverable was repaid to Thor Limited by the tax authorities on 31 March 2021. Property, plant and equipment that had cost 150,000 and which had a carrying amount of 25,000 was sold for 35,000 on 1 October 2021. Depreciation charged on property, plant and equipment during the year to 31 December 2021 amounted to 4,074,000. The cost of new property, plant and equipment purchased during the year was 10,790,000. Borrowings shown under current liabilities are made up of the bank overdraft at 31 December 2021. 8,427 432 859 8,000 1,600 6,400 | | Required: a) Prepare the statement of cash flows for Thor Limited for the year ended 31 December 2021 using the indirect method. [20 marks] b) The statement of cash flow is an integral part of the published accounts. Discuss what information this will provide for shareholders. [5 marks]