The following are the financial statements of Darussunnah Bhd:

Darussunnah Bhd

Statement of Profit or Loss and Other Comprehensive Income for the year ended

31 December 2017

RM

Turnover 436,300,000

Cost of sales -275,500,000

Gross profit 160,800,000

Administrative expenses -106,680,000

Selling and distribution cost -35,000,000

Operating profit 19,120,000

Finance costs -2,000,000

Increase in fair value of investment property 710,000

Loss on foreign currency translation -140,000

Investment income 640,000

Gain on disposal of long-term investment 550,000

Profit before tax 18,880,000

Taxation -7,000,000

Profit for the year

Other comprehensive income:

11,880,000

Surplus on revaluation of land 3,000,000

Total comprehensive income 14,880,000

Darussunnah Bhd

Statement of Changes in Equity for the year ended 31 December 2017

Ordinary shares Retained

profit

Asset

Revaluation

Reserve

RM RM RM

Balance as at 1 January 2017 1,039,830,000 130,780,000 420,000

Revaluation surplus 3,000,000

Issue of shares 116,860,000

Profit for the year 11,880,000

Dividend -5,600,000

Balance as at 31 December 2017 1,156,690,000 137,060,000 3,420,000

Darussunnah Bhd

Statement of Financial Position as at 31 December

Non-current assets

2016

RM

2017

RM

Property, plant and equipment 60,000,000(2016) 55,260,000(2017)

Investment property

19,290,000(2016) 20,000,000(2017)

Intangibles assets

2,100,000(2016) 6,300,000(2017)

Long term investments

2,000,000(2016) 1,600,000(2017)

Current assets

Inventories

3,400,000(2016) 5,500,000(2017)

Accounts receivable

16,000,000(2016) 11,800,000(2017)

Short-term investments

3,000,000(2016) 9,500,000(2017)

Interest receivable

220,000(2016) 140,000(2017)

Tax recoverable

180,000(2016) -(2017)

Cash at bank

1,099,910,000(2016) 1,213,270,000(2017)

Total assets

1,206,100,000(2016) 1,323,370,000(2017)

Financed by:

Share capital

1,039,830,000(2016) 1,156,690,000(2017)

Reserves

131,200,000(2016) 140,480,000(2017)

Non-current liabilities

Foreign Loan

1,520,000(2016) 1,260,000(2017)

5% Debentures

8,650,000(2016) 5,440,000(2017)

Current liabilities

Accounts payable

16,000,000(2016) 14,000,000(2017)

Dividend payable

7,200,000(2016) 3,400,000(2017)

Bank overdraft

1,500,000(2016) 1,200,000(2017)

Taxation payable

-(2016) 600,000(2017)

Interest payable

200,000(2016) 300,000(2017)

Total equity and liabilities

1,206,100,000(2016) 1,323,370,000(2017)

Additional information:

1. Part of the administrative expenses consisting of the depreciation charge for property, plant

and equipment of RM6,000,000 and the amortisation charge for intangible assets ofRM800,000.

2. There was a revaluation surplus on the property, plant and equipment upon revaluation on31 December 2017. Part of the property, plant and equipment were disposed of at cost.

3. It is the policy of Darussunnah Bhd to measure its investment property based on fair valuemodel. No new investment property was acquired during the year.

4. The foreign loan is a long term loan from Dutch Bank obtained on 31 December 2016amounted to USD400,000. The spot rate at the date is RM 3.80: USD 1. The company has

repaid part of the loan amounted to USD100,000 on 30 June 2017 when the spot rate isRM4.00: USD1. The closing rate on 31 December 2017 is RM4.20: USD1.

5. Details of intangible assets movement during the year were as follows:

Balance as at 1 January 2017

2,100,000

Incurred and capitalised during the year 5,000,000

Amortisation expense

-800,000

Balance as at 31 December 2017 6,300,000

6. The carrying value of long-term investment disposed was RM400,000.

7. Short-term investment are to be considered as cash and cash equivalent.

8. Last year's dividend payable were paid together with the current year's interim dividend of

RM2,200,000.

Required:

a. Prepare Statement of Cash Flow for Darussunnah Bhd for the year ended 31 December

2017 by using the direct method.

b. Prepare statement reconciling the profit before tax to cash flow from operations.

(Show all relevant workings)