QUESTION 2 (30 MARKS)

The summarised financial statements of Charmer Ltd for the year to 31 March 2018, together with a comparative statement of financial position, are:

Statement of financial position as at:
	31-Mar-18	31-Mar-17
Non-current assets	$ 000	$ 000
Property, plant and equipment	968	840
Investment	-	15
Software	225	60
Total Non-current assets	1193	915
Current assets
Inventory	368	405
Trade receivables	590	438
Investments - Government securities	23	135
Bank	-	94
Total Current assets	980	1072
Total assets	2173	1987
Equity and liabilities
Equity shares of $ 1 each	375	300
Share premium	113	60
Revaluation	25	20
Retained earnings	813	819
Total equity	1326	1199
Non-current liabilities
8% Long term loan	227	174
Current liabilities
Trade payables	495	432
Bank overdraft	34	-
Tax	62	160
Interest payable	30	23
Total Current liabilities	621	614
Total Equity and liabilities	2173	1987

Statement of comprehensive income for the year ended 31 Mar 18

	$ 000
Turnover	450
Cost of sales	(125)
Gross profit	325
Interest income	10
	335
Less: expenses:
Administrative costs and operating expenses	(135)
Amortization of software	(16)
Finance costs	(15)
Net profit before tax	169
Income tax	(25)
Net profit after tax	144

The following supporting information is available:

(i) Details relating to the non-current assets are:

	$ 000	$ 000	$ 000
	Cost	Depreciation	NBV
As at 31 March 2017	1103	263	840
As at 31 March 2018	1275	308	968

(ii) During the year, depreciation for the asset property, plant and equipment amounting to $ 65,000 was charged in the statement of comprehensive income.

(iii) Charmer Ltd sold a freehold property for $ 50,000. Charmer Ltd then acquired another for property at a cost of $ 225,000.

(iv) The revaluation reserve is due to the revaluation of a property.

(v) The investment (non-current assets) was sold for $ 25,000 and the profit was recorded in the statement of comprehensive income.

(vi) Ordinary shares were issued during the year for cash.

(vii) Dividend amounting to $ 150,000 was paid on 31 March 2018.

(viii) Investments in government securities are considered highly liquid with a maturity of less than three months.

REQUIRED:

Prepare a statement of cash flows for Charmer Ltd for the year to 31 March 2018 in accordance with IAS 7 statement of cash flows, using the indirect method. [30 Marks]