Question One You have been given the following information relating to a limited liability company called Noble. This company is preparing its financial statements for the year ended 31 May 2006. Noble Ltd Income statement for the year ended 31 May 2006 Revenue Cost of sales K Millions Gross profit Distribution costs Administrative expenses Profit from operations Investment income Finance cost Profit before tax Tax Net profit for the period Accumulated profits brought Forward at 1 June 2005 66,600 (13,785) 52,815 (7,530) (2.516) 42,769 146 (1.177) 41,738 (9,857) 31,881 28.063 Accumulated profits carried Forward at 31 May 2006 59,944 Noble Lid Balance Sheets as at 31 May 2006 2005 K. Millions K Millions K Millions K. Millions Non-current assets Cost 144,844 Accumulated depreciation (27.433) 114,785 (26.319) 117,411 88,466 Current Assets Inventory 24.931 Trade receivables 18,922 24.065 13.238 Cash 3,689 47,542 2,224 39,527 Total assets 164,953 127,993 Equity and liabilities Capital and reserver Ordinary share capital 27,000 23,331 Share premium 14,569 10,788 Revaluation reserve 15,395 7,123 Accumulated profits 59,944 116,908 28.063 6,305 116,908 69,305 Non-current liabilities 6% loan note 17,824 24,068 Current Liabilities Bank overdraft 5,533 6,973 Trade payables 16,699 20,324 Taxation 7,989 30,221 7,323 34,620 Total equity and liabilities 164,953 127,993 Additional information 6) During the year ended 31 May 2006, the company sold a piece of equipment for K3, 053,000,000, realising a profit of K1, 540,000,000. There were no other disposals of non- current assets during the year. (ii) (iii) Profit from operations is stated after charging depreciation of KS, 862,000,000. There were no amounts outstanding in respect of interest payable or receivable as at 31 May 2006 or 2005. (iv) There were no dividends paid or declared during the year. Required: Prepare a cash flow statement for Noble for the year ended 31 May 2006 in accordance with IAS 7 Cash Flow Statements. Question Two 20 marks