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(ANSWER ANY TWO (2) QUESTIONS) QUESTION 2 (30 MARKS) The summarised financial statements of Charmer Ltd for the year to 31 March 2 together with a comparative statement of financial position, are: Statement of financial position as at: Non-current assets Property, plant and equipment Investment Software Total Non-current assets 31-Mar-18 31-Mar-17 $ 000 $ 000 968 840 15 225 60 1,193 915 Current assets Inventory Trade receivables Investments - Government securities Bank Total Current assets 368 590 23 405 438 135 980 94 1,072 Total assets 2,173 1,987 Equity and liabilities Equity shares of $ 1 each Share premium Revaluation Retained earings Total equity 375 113 25 813 1,326 300 60 20 819 1,199 Non-current liabilities 8% Long term loan 227 174 Current liabilities Trade payables Bank overdraft Tax Interest payable Total Current liabilities 432 495 34 62 30 621 160 23 614 Total Equity and liabilities 2,173 1,987 Page 4 of 9 Statement of comprehensive Income for the year ended 31 Mar 18 $ 000 Turnover 450 Cost of sales (125) Gross profit 325 Interest income 10 335 Less expenses: Administrative costs and operating expenses (135) Amortization of software (16) Finance costs (15) Net profit before tax 169 Income tax (25) Net profit after tax 144 The following supporting information is available: (0) Details relating to the non-current assets are: Property, plant and equipment As at 31 March 2017 As at 31 March 2018 $ 000 Cost 1,103 1,275 $ 000 Depreciation 263 308 $ 000 NBV 840 968 (1) During the year, depreciation for the asset property, plant and equipment amounting to $ 65,000 was charged in the statement of comprehensive income. (iii) Charmer Ltd sold a freehold property for $ 50,000. Charmer Ltd then acquired another for property at a cost of $ 225,000. (iv) The revaluation reserve is due to the revaluation of a property. The investment (non-current assets) was sold for $ 25,000 and the profit was recorded in the statement of comprehensive income. (vi) Ordinary shares were issued during the year for cash. (vii) Dividend amounting to $ 150,000 was paid on 31 March 2018. (viii) Investments in the government securities are considered highly liquid with a maturity of less than three months. REQUIRED: Prepare a statement of cash flows for Charmer Ltd for the year to 31 March 2018 in accordance with IAS 7 statement of cash flows, using the indirect method. [30 Marks] Page 5 of 9