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Coaltown is a wholesaler and retailer of office furniture. Extracts from the company’s financial statements are set out below:

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED:

  31-Mar-09 31-Mar-08
  $000 $000 $000 $000
Revenue  – cash 12,800   26,500  
  – credit   53,000   65,800   28,500   55,000
  ––––––   ––––––  
Cost of sales   -43,800   -33,000
    ––––––   ––––––
Gross profit   22,000   22,000
Operating expenses   -11,200   -6,920
Finance costs – loan notes -380   -180  
  – overdraft -220 -600 nil -180
  –––––– –––––– –––––– ––––––
Profit before tax   10,200   14,900
Income tax expense   -3,200   -4,400
    ––––––   ––––––
Profit for period   7,000   10,500
Other comprehensive income        
Gain on property revaluation   5,000   1,200
    ––––––   ––––––
Total comprehensive income
for the year
  12,000   11,700
    ––––––   ––––––

 

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 MARCH 2009:

  $'000 $'000 $'000 $'000 $'000
    CAPITAL   PREMIUM R/R R/E Total 
Balances b/f  8,000 500 2,500 15,800 26,800
Share issue  8,600 4,300     12,900
Comprehensive income 5,000 7,000 12,000
Dividends paid              -4,000 -4,000
    ––––––   ––––––   –––––– –––––– ––––––
Balances c/f    16,600 4,800   7,500   18,800   47,700
    ––––––   ––––––   –––––– –––––– ––––––

 

 

STATEMENT OF FINANCIAL POSITION AS AT:

    2009   2008
  $'000 $'000 $'000 $'000
Assets        
Non-current assets (see note)        
Cost    93,500   80,000
Accumulated depreciation      -43,000   -48,000
    ––––––   ––––––
    50,500   32,000
Current assets        
Inventory 5,200   4,400  
Trade receivables    7,800   2,800  
Bank nil 13,000 700 7,900
  –––––– –––––– –––––– ––––––
Total assets   63,500   39,900
    ––––––   ––––––
Equity and liabilities        
Equity shares of $1 each   16,600   8,000
Share premium   4,800   500
Revaluation reserve   7,500   2,500
Retained earnings   18,800   15,800
    ––––––   ––––––
    47,700      26,800
    ––––––   ––––––
Non-current liabilities   4,000   3,000
10% loan notes        
Current liabilities        
Bank overdraft 3,600   Nil  
Trade payables 4,200   4,500  
Taxation 3,000   5,300  
Warranty provision 1,000 11,800 300 10,100
  –––––– –––––– –––––– ––––––
Total equity and liabilities   63,500   39,900
    ––––––   ––––––

 

During the year the company redesigned its display areas in all of its outlets. The previous displays had cost $10 million and had been written down by $9 million. There was an unexpected cost of $500,000 for the removal and disposal of the old display areas. Also during the year the company revalued the carrying amount of its property upwards by $5 million, the accumulated depreciation on these properties of $2 million was reset to zero. All depreciation is charged to operating expenses. 

Requirements:

Prepare a statement of cash flows for Coaltown for the year ended 31 March 2009 in accordance with IAS 7 Statement of Cash Flows by the indirect method. 

Marks: 20

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