Question
QUESTION The statement of profit or loss of Regal Plc for the year ended 31 December 2020 is presented below. The statement of financial position
QUESTION
The statement of profit or loss of Regal Plc for the year ended 31 December 2020 is presented below. The statement of financial position of Regal Plc as at 31 December 2020 is also shown.
'000
Revenue 1,900
Cost of sales 1,226
Gross profit 674
Distribution expenses 126
Administrative expenses 250
Operating profit 298
Finance costs 56
Profit before tax 242
Taxation 61
Profit for the year 181
Statements of financial positions as at 31 December
|
|
|
Assets | 2020 | 2019 |
Non-current assets | 000 | 000 |
Property, plant and equipment | 810 | 820 |
Intangible assets | 250 | 250 |
| 1,060 | 1,070 |
Current assets |
|
|
Inventory | 212 | 230 |
Trade receivables | 586 | 439 |
Cash and cash equivalents | 62 | 80 |
| 860 | 749 |
Total assets | 1,920 | 1,819 |
|
|
|
Capital and reserves |
|
|
Ordinary share capital | 270 | 250 |
Share premium account | 514 | 480 |
Reserves | 110 | 110 |
Retained earnings | 594 | 455 |
Total equity | 1,488 | 1,295 |
Non-current liabilities |
|
|
Long-term loans | 105 | 120 |
Current liabilities |
|
|
Bank overdraft | 53 | 92 |
Trade payables | 154 | 186 |
Interest payable | 34 | 20 |
Tax payable | 86 | 106 |
| 327 | 404 |
Total equity and liabilities | 1,920 | 1,819 |
Note 1 Administrative expenses include depreciation of 81,000.
Note 2 An item of property, plant and equipment was disposed of during the year. Its net book value and the time of the disposal was 59,000 and the proceeds received were 70,000.
Note 3 A dividend of 42,000 was paid in March 2020
Required:
- Prepare a statement of cash flows in accordance with IAS 7 Statement of cash flows.
(15 marks)
- Discuss why a statement of cash flow is required and its usefulness to the investor.
(7 marks)
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