QUESTION 2 [25 MARKS] IAS 1 requires that one of the elements of a set of financial statements is a Cash flow statement Prepare, using the indirect method, a statement of cash flows for Seratus for the year to 31 December 2019 in accordance with IAS 7 Statement of Cash Flows from the information given hereunder. Statements of financial position as at: 31-Dec-19 31-Dec-18 $ 000 $ 000 Non-Current assets Property, plant & equipment (at net book value) 27,400 22,000 Software 1,600 2,000 Investments 300 250 Total non-current assets 29,300 24,250 Current assets Inventories Trade receivables Short term investments - Treasury bills Bank Total current assets 3,080 10,800 1,000 7,000 180 135 8,315 180 14,060 Total assets 43,360 32,565 Equity and liabilities Capital and reserves Equity shares of $ 1 each Share premium Revaluation reserve Retained earnings Total capital and reserves 12,000 2,500 2,400 7,590 24,490 10,000 500 1,500 1,930 13,930 Non-current liabilities 9% loan notes 1,800 1,000 Current liabilities Bank overdraft Trade payables Tax payables Interest payables Total current liabilities 7,000 8,000 2,000 70 17,070 8,325 7,000 2,200 110 17,635 Total equity and liabilities 43,360 32,565 Statement of profit or loss for the year ended 31 December 2019 Revenue Cost of sales Gross profit Interest received Gross profit after interest received Administrative expenses Finance costs Profit before tax Income tax expense Profit for the year $000 36,000 (24,000) 12,000 800 12,800 (2,000) (240) 10,560 (2,400) 8,160 Other information 1. During the year, Seratus has disposed an equipment: Cost Depreciation Proceeds received upon disposal $ 000 2,500 2,000 800 2. Details of accumulated depreciation with respect to Property. Plant and Equipment are as follows: $ 000 As at 31 December 2018 5,000 As at 31 December 2019 6,000 3. The company has issued 2,000,000 shares for cash on 30 September 2019. 4. Revaluation reserve in the statement of financial position relates only to the non- current assets of property, plant and equipment. 5. Dividend amounting to $ 2,500,000 was paid to shareholders. 6. During the year, the company has acquired a software for $ 200,000. 7. The treasury bills were matured on 15 February 2019. 8. The movement in investments (non-current assets) relates only to acquisition of 5% shares in a company