Question 2 Below are extracts from the financial statements of Aqua Plc: Statement of profit or loss for the year ended 31 December 2021 f Revenue 321,825 Cost of sales (273,000) Gross profit 48,825 Investment income 7,140 Loss on disposal (60) Distribution costs (9,450) Administrative expenses (5,250) Profit from operations 41,205 Finance costs (4,200) Profit before tax 37,005 Income tax expense (3,150) Profit for the period 33,855 31 December 2020 8,925 26,250 Statements of financial position 31 December 2021 Assets f Non-current assets Property, plant and equipment 23,880 Investments 26,250 50,130 Current assets Inventories 10,500 Trade and other receivables 19,950 Cash and cash equivalents 4,305 34,755 Total assets 84,885 35,175 20,475 12,600 1,680 She 34,755 69,930 Equity and liabilities Capital and reserves Share capital Share premium Retained earnings 10,500 5,250 35,745 9,450 3,675 14,490 51,495 27,615 Non-current liabilities Long term borrowings 24,150 10,920 Current liabilities Trade and other payables Interest payable Taxation 2,625 2,415 4,200 19,845 1,050 10,500 9,240 84,885 31,395 69,930 Total equity and liabilities Page 5 of 10 Additional data 1. The share capital of the company consists of ordinary shares with a nominal value of 1.00. 2. The inventories at the close of business on 31 December 2021 were valued at 19,782,000. 3. Land, which is non-depreciable, is to be revalued to 46,000,000 and this revaluation is to be included in the financial statements for the year ended 31 December 2021. 4. Depreciation is to be provided for the year to 31 December 2021 as follows: Buildings 2.5% per annum Straight line basis This should be charged to administrative expenses. 5. Depreciation is to be provided for the year to 31 December 2021 as follows: Plant & equipment 15% per annum Reducing balance basis This is to be apportioned as follows: Cost of sales Distribution costs Administrative expenses 60% 20% 20% 6. It has been decided to write off a debt of 309,000 which will be charged to administrative expenses. 7. Included within selling & distribution costs is 2,100,000 relating to the advertising costs that will run from 1 July 2021 to 30 June 2022. This cost is allocated evenly throughout this period. 8. The interest included within the trial balance relates to the interest paid on the bank loan for the first six months of the financial year. 9. The corporation tax charge for the year has been calculated as 5,670,000. 10. All of the operations are continuing operations. Additional information: 1. Profit from operations is after charging depreciation on the property, plant and equipment of 4,725. 2. Plant and machinery costing 840 and with accumulated depreciation of 630, was sold during the year. 3. Investment income of 7,140 is made up of 3,150 interest receivable and 3,990 dividends received. 4. On the 1 April 2021 Aqua Plc paid the final dividend for financial year 2020 which was finalised at 9,450. On the 1 July 2021 Aqua Plc also paid an interim dividend for financial year 2021 for 3,150. Required: Using the pro-forma in your answer booklet provided prepare a statement of cash flows for Aqua Plc for the year ended 31 December 2021 in compliance with IAS 7 Statement of Cash Flows. Total: (25 marks)
