QUESTION 2 26 MARKS] Below are the statements of financial position of Altamont Limited as at 31 March 2018 and 31 March 2017, together with the statement of profit or loss and other comprehensive income for the year ended 31 2018. 2018 $000 2017 $'000 Non-current assets Property, plant and equipment Development Expenditure 925 290 1,215 737 160 897 360 Current assets Inventories Trade receivables Investments 274 143 227 324 46 117 714 1611 Cash 29 806 2021 Total assets Equity Share capital si Ordinary shares Share premium Revaluation surplus Retained Earnings 500 350 160 229 1,239 400 100 60 255 815 Non-Current liabilities 12% Debentures Finance Lease Liabilities Deferred Tax 150 100 48 298 100 80 45 225 274 17 Current Liabilities Trade payables Finance Lease Liabilities Current Tax Debenture interest DAN 352 12 153 56 132 54 Share premium Revaluation surplus Retained Earnings 350 160 229 1,239 100 60 255 815 Non-Current liabilities 12% Debentures Finance Lease Liabilities Deferred Tax 150 100 48 100 80 45 225 298 Current Liabilities Trade payables Finance Lease Liabilities Current Tax Debenture interest Bank overdraft 274 17 56 5 132 484 2,021 352 12 153 0 54 571 1,611 Total equity and liabilities Statement of Comprehensive Income for the year ended 31 December 2018 $.000 1476 Revenue Cost of sales (962) Gross profit 514 Other expenses (15Z Finance costs (15) 342 Profit before tax Income tax expenses (162) 180 Profit for the year Other comprehensive income 100 Gain on revaluation of property, plant & equipment 280 Total comprehensive income for the year Additional information: (i) During 2018, amortisation of $60,000 was charged on development projects, (ii) During 2018 items of property, plant and equipment with a carrying amount of S103.000 were sold for $110.000. Profit on sale was netted off against other expenses. Depreciation charged in the year on property, plant and equipment totalled $57,000. Altamont acquired $56 000 of property, plant and equipment by means of leases, payments being made in arrears on the last day of each accounting period. (iii) (iv) The current asset investments are government bonds and management has decided to class them as cash equivalents The new debentures were issued on 1 April 2017. Finance cost includes debenture interest and lease finance charges only. During the year Altamont made a I for 8 bonus issue, capitalising its retained earnings, followed by a rights issue, (v) Required (a) Prepare a statement of cash flows for Altament in accordance with IAS 7 using the indirect method. (21 marks) (b) Comment on the statement of cash flows calculated in part(a) above
