- 20 Marks
FR – L2 – Q73 – Statement of Cash Flows
Prepare a cash flow statement for Fellon Plc for 20X4 using IAS 7, based on provided financial data and additional information.
Question
Fellon Plc has prepared the following rough draft accounts for the year ended 31 December 20X4.
Statement of profit or loss
| GH₵’000 | |
|---|---|
| Revenue | 11,563 |
| Cost of sales | (5,502) |
| Gross profit | 6,061 |
| Distribution costs | (402) |
| Administration expenses | (882) |
| Interest payable | (152) |
| Operating profit before tax | 4,625 |
| Taxation (35%) including deferred tax | (1,531) |
| Profit after tax | 3,094 |
| Dividends | (700) |
| Retained profit | 2,394 |
Statements of financial position
| 31 December 20X4 GH₵’000 | 31 December 20X3 GH₵’000 | |
|---|---|---|
| Non-current assets | ||
| Property, plant and equipment | 10,380 | 9,108 |
| Current assets | ||
| Inventories | 2,208 | 1,314 |
| Trade receivables | 1,986 | 1,392 |
| Investments | 1,992 | 2,190 |
| Cash at bank and in hand | – | 576 |
| 6,186 | 5,472 | |
| Total assets | 16,566 | 14,580 |
| Equity and liabilities | ||
| Equity | ||
| Share capital | 4,392 | 3,600 |
| Retained earnings | 6,714 | 4,320 |
| 11,106 | 7,920 | |
| Non-current liabilities | ||
| Long-term loans | 1,240 | 1,800 |
| Deferred repairs provision | 702 | 516 |
| 1,942 | 2,316 | |
| Current liabilities | ||
| Trade payables | 2,038 | 1,714 |
| Bank overdraft | 222 | – |
| Taxation | 1,258 | 2,630 |
| 3,518 | 4,344 | |
| Total equity and liabilities | 16,566 | 14,580 |
The following data is relevant.
(1) The 10% long-term loan was redeemed at par.
(2) Plant and equipment with a written down value of GH₵276,000 was sold for GH₵168,000. New plant was purchased for GH₵2,500,000.
(3) Buildings costing GH₵1,300,000 were acquired during the year.
(4) The investments are highly liquid securities held for the short term.
Required
Prepare the cash flow statement and supporting notes in accordance with IAS 7 for Fellon Plc for 20X4.
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