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The following information relates to the draft financial statements of Mocha:

SUMMARIZED STATEMENTS OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 
  20X1
     $'000
20X0
          $'000
ASSETS    
Non-current assets     
Property, plant and equipment (note (i)) 32,600 24,100
Financial asset: equity investments (note (ii)) 4,500 7,000
  37,100      31,100
Current assets     
Inventory 10,200 7,200
Trade receivables 3,500 3,700
Bank         nil  1,400
  13,700 12,300
Total assets 50,800 43,400
EQUITY AND LIABILITIES    
Equity     
Equity shares of $1 each (note (iii)) 14,000 8,000
Share premium (note (iii)) nil 2,000
Revaluation reserve (note (iii)) 2,000 3,600
Retained earnings 13,000 10,100
  29,000 23,700
     
     
Finance lease obligations  7,000 6,900
 Deferred tax  1,300 900
Current liabilities     
Tax  1,000 1,200
Bank overdraft  2,900 nil
Provision for product warranties (note (iv))  1,600 4,000
Finance lease obligations  4,800 2,100
Trade payables   3,200 4,600
Total equity and liabilities     50,800      43,400

 

SUMMARISED STATEMENTS OF PROFIT OR LOSS FOR THE YEARS ENDED 30 SEPTEMBER:
  20X1 20X0
       $'000      $'000
Revenue  58,500 41,000
Cost of sales  -46,500 -30,000
Gross profit  12,000 11,000
Operating expenses  -8,700 -4,500
Investment income (note (ii))  1,100 700
Finance costs  -500 -400
Profit before tax  3,900 6,800
Income tax expense  -1,000 -1,800
Profit for the year  2,900 5,000

 

The following additional information is available:

 

(i) Property , Plant and equity

  Cost    Accumulated depreciation Carrying amount
       $'000     $'000      $'000
At 30 Sep 20X0 33,600 (9,500) 24,100
Additions to right to use assets 6,700   6,700
Purchase of new plant 8,300   8,300
Disposal of property (5,000) 1,000 (4,000)
Depreciation for the year   (2,500) (2,500)
At 30 Sep 20X1 43,600 (11,000) 32,600

 

The property disposed of was sold for $8.1 million.

 

(ii) Investments/ Investment income:

During the year an investment that had a carrying amount of $3 million was sold for $3.4 million.  No investments were purchased during the year.

Investment income consists of:

Year to 30 Sep:      20X1      20X0
  $'000 $'000
Dividends received 200 250
Profit on sale of investment 400 -
Increase in fair value 500 450
  1,100 700

 

(iii) On 1 April 20X1 there was a bonus issue of shares that was funded from the share premium and some of the revaluation reserve. This was followed on 30 April 20X1 by an issue of shares for cash at par.

(iv) The movement in the product warranty provision has been included in cost of sales.

Requirements:

Prepare a statement of cash flows for Mocha for the year ended 30 September 20X1, in accordance with  IAS 7 Statement of cash flows, using the indirect method.

Marks: 20

Answers submitted

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