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Dicson

Below are the statements of financial position of Dickson as at 31 March 20X8 and 31 March 20X7, together with the statement of profit or loss and other comprehensive income for the year ended 31 March 20X8.

   20X8   20X7 
   $'000  $'000
Non-current assets     
Property, plant and equipment  925 737
Development expenditure 290 160
  1,215 897
Current assets     
Inventories 360 227
Trade receivables 274 324
Investments 143 46
Cash 29 117
  806 714
Total assets 2,021 1,611
     
     
Equity     
Share capital – $1 ordinary shares 500 400
Share premium 350 100
Revaluation surplus 160 60
Retained earnings 229 255
  1,239 815
Non-current liabilities     
6% debentures 150 100
Finance lease liabilities 100 80
Deferred tax 48 45
  298 225
     
Current liabilities     
Trade payables 274 352
Finance lease liabilities 17 12
Current tax 56 153
Debenture interest 5  – 
Bank overdraft 132 54
  __ 484 571
Total equity and liabilities           2,021           1,611
   
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
     $'000
Revenue 1,476
Cost of sales -962
Gross profit 514
Other expenses -157
Finance costs -15
Profit before tax 342
Income tax expense -162
Profit for the year 180
Other comprehensive income:  
Gain on revaluation of property, plant and equipment 100
Total comprehensive income for the year 280

 

Notes:

  1. During 20X8, amortization of $60,000 was charged on development projects. 
  2. During 20X8 items of property, plant and equipment with a carrying amount of $103,000 were sold for $110,000.  Profit on sale was netted off against 'other expenses'.  

Depreciation charged in the year on property, plant and equipment totalled $57,000. Dickson purchased $56,000 of property, plant and equipment by means of finance leases, payments being made in arrears on the last day of each accounting period.

  1. The current asset investments are government bonds and management has decided to class them as cash equivalents.
  2. The new debentures were issued on 1 April 20X7. Finance cost includes debenture interest and finance lease finance charges only.
  3. During the year Dickson made a 1 for 8 bonus issue, capitalizing its retained earnings, followed by a rights issue.

Requirements:

a

(i)   Prepare a statement of cash flows for Dickson in accordance with IAS 7 using the indirect method.

 

Answer
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