The following information has been extracted from the draft financial statements of Bradford Ltd for the year ended 31 October 2020. All figures are expressed in 000s.

Income statement for the year ended to 31 October 2020

Sales	106
Cost of sales	(14)
Gross profit	92
Less: Expenses	(12)
Operating profit	80
Interest expense	(4)
Interest income	3
Loss on disposal of non-current asset	(9)
Profit before taxation	70
Taxation	(36)
Profit after taxation	34

Balance sheet as at:

	31 October 2020		31 October 2019
Non-current assets		1,650		1,240
Current assets
Inventory	470		165
Trade receivables	188		201
Cash at bank	220		0
Total assets		2,528		1,606
Current liabilities
Bank overdraft	0		50
Trade payables	860		406
Non-current liabilities
Long-term bank loan	284		356
Equity
Share capital (1)	526		422
Share premium	375		178
Other reserves	483		194
Total equity and liability		2,528		1,606

Additional information:

1. Accumulated depreciation at the start of the year amounted to 20,000, and the closing depreciation provision stood at 50,000.
2. During the financial year, there was no revaluation on the Non-current Assets.
3. Interest and Taxation balance

	2020	2019
Interest	24,000	32,000
Taxation	66,000	38,000

4. Bradford Ltd has received the dividend of 78,000 and paid the dividend of 33,000 to shareholders.
5. The historical cost of the non-current asset has been sold is 54,000. Depreciation which had been charged on the assets sold in the year totalled 10,000.
6. The historical cost of the non-current assets at the start of the year was 1,550,000. The total historical cost of non-current assets on 31 October 2020 was 1,750,000.

You Are Required To:

a. Use the indirect method to prepare a cash flow statement for the year ending 31 October 2020 in accordance with IAS 7.

(16 Marks)

b. During the reporting period, Bradford Ltd purchased 6% of the ordinary shares of Edge Hill, a public limited company. The share price of Edge Hill has risen considerably over the year and the fair value of the shares at the reporting date is 9 million. Edge Hill is listed on a stock exchange, and so Bradford Ltd can sell the shares quickly if it experiences short-term cash flow shortages. The finance director has included this investment at 9 million as part of cash and cash equivalents in the statement of cash flows. Discuss this accounting treatment in accordance with IAS 7.

(6 Marks)

c. Briefly comment on the cash position of Bradford Ltd.

(3 Marks)

[Total 25 Marks]