QUESTION FOUR Pasuman is a publicly listed company. The following financial statements of Pasuman are available: Statement of comprehensive income for the year ended 31 March 2017 GH000 Revenue 5,740 Cost of sales (4.840 Gross profit 900 Income from and gains on investment property 60 Distribution costs (120) Administrative expenses (note () (350) Finance costs (50 Profit before tax 440 Income tax expense (60) Profit for the year 280 Other comprehensive income Gains on property revaluation 100 Total comprehensive income 380 Statements of financial position as at 31 March 2017 GH 000 GH000 31 March 2016 GH000 GH 000 Non-Current Assets (note (1) Property, plant and equipment Investment property 2.880 1.860 400 2.260 3.300 810 540 1.210 480 nil 10 SO Current Assets Inventory Trade receivables Income tax asset Bank Total assets Equity and Liabilities Equity shares of 20 cents cach (note (iii)) Share premium Revaluation reserve Retained carnings 1200 5.000 1400 3.66 1.000 600 600 nil SO 1.310 150 1.440 2.190 3.190 Page 768 1.360 1,960 Examiner: Samuel Gamli Gada nil 400 50 SO 430 nil 120 200 100 Non-Current Liabilities 6% loan notes (note (ii) Deferred tax 30 Current liabilities Trade payables 1,410 1,050 Bank overdraft Warranty provision (note (iv)) Current tax payable 150 1.760 nil 1.270 Total Equity and Liabilities 5.000 3.660 The following supporting information is available: i. An item of plant with a carrying amount of GH 240,000 was sold at a loss of GH 90,000 during the year. Depreciation of GH 280,000 was charged (to cost of sales) for property, plant and equipment in the year ended 31 March 2017 ii. Pasuman uses the fair value model in IAS 40 Investment Property. There were no purchases or sales of investment property during the year. The 6% loan notes were redeemed early incurring a penalty payment of GH 20,000 which has been charged as an administrative expense in the income statement. iv. There was an issue of shares for cash on 1 October 2016. There were no bonus issues of shares during the year Pasuman gives a 12 month warranty on some of the products it sells. The amounts shown in current liabilities as warranty provision are an accurate assessment, based on past experience, of the amount of claims likely to be made in respect of warranties outstanding at each year end, Warranty costs are included in cost of sales. vi. A dividend of 3 cents per share was paid on 1 January 2017. Required: a. Prepare a statement of cash flows for Pasuman for the year to 31 March 2017 in accordance with IAS 7 Statement of cash flows. (10 marks) b. Comment on the cash flow management of Pasuman as revealed by the statement of cash flows and the information provided by the above financial statements. (5 marks) (Total: 15 marks) v