QUESTION FIVE a) The following information is provided by Kimtai limited in Eldoret KIMTAI LIMITED FINANCIAL POSITION STATEMENT AS AT 31st MAR 2010 Assets Non current assets 3 2010 Sh.'000' 2009 Sh.'000' Land and buildings 95,000 55,000 Motor vans 46,000 35,000 Fixtures and fittings 25,000 28,000 166,000 118,000 Current assets Stock 28,000 20,000 Debtors 14,000 16,000 prepayments 6,000 8,000 bank and cash balance 3,000 48,000 47,000 Total assts 214,000 165,000 Equity and liabilities Capital and reserves Ordinary share capital Share premium 80,000 50,000 Revaluation reserve 20,000 15,000 Retained profit 15,000 15,000 18,000 15,000 Noncurrent liabilities 36,000 30,000 10% Debenture loan Bank loan 30,000 20,000 6,000 10,000 Current liabilities Trade creditors Interest payable 23,000 15,000 Current tax 9,000 6,000 Bank overdraft 6,000 5,000 Proposed dividend 4,000 3,000 4,000 Total equity and liabilities 45,000 30,000 214,000 214,000 Additional information i. Land and building were revalued upwards by sh 10,000,000 during the year. In addition and acquisition of land and building of shs 40,000,000 was made ii. Depreciation on motor vans amounting to sh 4,000,000 was provided in the profit and loss account for the year. Motor vans having a net value of shs 8,000,000 were sold at a profit of sh 3,000,000 during the year iii. Bonus shares of sh 20,000,000 were issued at per during the year by utilizing the revaluation reserve, Kimtai limited ordinary shares have a par value of shs 20 iv. Interest expense charged to the profit and loss account for the year amounted to sh. 8,000,000. v. During the year, tax amounting to 6,000,000 was paid vi. Total dividends for the year (both interim and final) amounted to 5,000,000 vii. Net profit after tax for the year amounted to shs, 8,000,000 Required Prepare a cash flow statement for the year ended 31st March 2010 in accordance to IAS7 using the indirect method marks) (10 b) What is Historical accounting and what are the limitations of Historical Cost Accounting (HCA) (7 marks)