Y plc's income statement for the year ended 31 December 2012 and statements of financial position as at 31 December 2011 and 31 December 2012 were as follows: Y plc - Income statement for the year ended 31 December 2012 000 000 Sales revenue 360 Raw materials consumed (35) Staff costs (47) Depreciation (59) Loss on disposal of machinery (9) (150) Operating profit 210 Interest payable (14) Profit before tax 196 Income tax expense (62) Profit after tax 134 Y plc Statement of Financial Position as at 31 December 2012 2011 Non-current assets '000 '000 '000 '000 Cost 798 780 Depreciation (159) (112) Current assets 639 668 Inventory 12 10 Trade receivables 33 25 Bank 24 69 28 63 Equity and liabilities 708 731 UU-FNE-4400-ZM -Financial Analysis Share capital 180 170 Share premium 18 12 Retained earnings 358 257 Non-current liabilities 556 439 Long-term loans 100 250 Current liabilities Trade payables 6 3 Income tax 46 39 52 42 708 731 During the year, Y plc paid 45,000 for a new piece of machinery. A dividend of 33,000 was paid during the year. Required: 1. Prepare a statement of cash flow for Y plc for the year ended 31 December 2012 in accordance with the requirements of IAS 7.

2. Comment on the purpose of a statement of cash flow illustrating your points using the statement prepared in part (a) of the question.