Question One Below are the financial statements of E. Company LTD. E. Company LTD INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2022 000 Revenue 2,553 Cost of Sales (1,814) Gross Profit 739 Other income: interest received 25 Distribution costs (125) Administrative expenses (264) Finance costs (75) Profit before tax 300 Income tax expense (140) Profit for the year 160_ E. CO STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 2022 2021 Assets 000 000 Non-current assets Property, plant and equipment 380 305 Intangible assets 250 200 Investments - 25 Current assets Inventories 150 102 Receivables 390 315 Short term investments 50 - Cash in hand 2 1 Total assets 1,222 948 Equity and Liabilities Equity Share capital (sh.1 Ordinary shares) 200 150 Share premium account 160 150 Revaluation surplus 100 91 Retained earnings 260 180 Non-current liabilities Long term loan 170 50 Current Liabilities Trade payables 127 119 Bank overdraft 85 98 Taxation 120 110 Total equity and liabilities 1,222 948 The following is available. (a) The proceeds of the sale of non-current asset investments amounted to sh30,000. (b) Fixtures and fittings, with an original cost of sh85,000 and a net book value of sh45,000 were sold for sh32,000 during the year (Reference to IAS 16) (c) The following information relates to property, plant and equipment 31.12.2022 31.12.2021 000 000 Cost 720 595 Accumulated depreciation 340 290 Net book value 380 305 (d) The short-term investments are treated as part of cash in the company. (e) Dividends of sh80,000 were paid during the year. Required Prepare a statement of cash flows for the year to 31 December 2022 . ( 35 Marks) HINTS This are the guidelines on the most important steps: 1. On note 1: the investments on the balance sheet in the year 2021 has disappeared hence have been sold at sh.30,000. 2. On note two. Make a disposal account to know the profit made on the disposal of fixtures: 3. On note 3. To get how much of assets that were purchase, make non-current asset account Dr. Cr. Bal b/d 595000 Disposed (fixture) 85000 Revaluation surplus (100-91) 90000 Purchase (bal.Fig) 201000 Bal c/d 720,000 805000 805000 4.Also to get the amount that was supposed to be reported in the Income statement as depreciation: Make the provision for depreciation account. 5.Also note that the intangible assets in the balance sheet increased from 200,000 to 250,000, 6.The opening cash will be ( cash + investments 2021= 0+1)- Bank overdraft (98)=(97) 7.The closing cash will be( cash +investments 2020= 50+2)- Bank overdraft (85)=(33) Increase in cash 64. Since the negative has reduced.