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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.
Answers submitted
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