5 Prepare a statement of cash flows in acceptable form for Peak Ltd for the year ended 31 December 20X5.

 

STATEMENT OF FINANCIAL POSITIONS AS AT

31.12.X4                             31.12.X5

Property, plant and equipment nbv

Buildings                                                   543,100                            624,500

Other                                                            93,450                            102,300

Investments                                                56,000       692,550     142,000        868,800

–––––––––                                          –––––––––

Current assets:

Inventory                                               82,400                              83,400

Trade receivables                                54,300                              48,750

Bank                                                         1,100

–––––––––

137,800                            132,150

–––––––––                                          –––––––––

Current liabilities falling due within one year:

Trade payables                                          63,470                              35,480

Taxation                                                      10,500                              12,500

Dividends                                                    35,000                              38,000

Bank                                                                                                      10,500

–––––––––

108,970                              96,480

–––––––––                                          –––––––––

 

 

Net current assets                                                             28,830                              35,670

–––––––––                                          –––––––––

Total assets less current liabilities                                   721,380                            904,470

Non-current liabilities due after one year:

5% Debentures                                                                 45,000                            150,000

–––––––––                                          –––––––––

Net assets                                                                       676,380                            754,470

–––––––––                                          –––––––––

Capital reserves

Ordinary £1 shares                                                           600,000                            620,000 Share premium account                                                                                                                                          40,000

Revaluation reserve                                                        50,000                              70,000

Retained profits                                                                26,380                              24,470

–––––––––                                          –––––––––

676,380                            754,470

–––––––––                                          –––––––––

 

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER

20X4                  20X5

Profit before tax                                            65,600               48,590

Taxation                                                        10,500               12,500

–––––––              –––––––

Profit after tax                                              55,100               36,090

Dividends                                                      35,000               38,000

–––––––              –––––––

Retained profit for the year                          20,100                (1,910)

Retained profit b/f 1 January                          6,280               26,380

–––––––              –––––––

Retained profit at 31 December                  26,380               24,470

–––––––              –––––––

 

The following additional information is  available:

   A market issue of shares was made on 1 January 20X5.

   During 20X5 equipment originally purchased at £65,200 was sold for £17,900, accumulated depreciation being £37,700. The difference on disposal had been taken to the statement of comprehensive income.

   Buildings costing £100,000 had been purchased during 20X5 and the deprecia- tion charged for the year 20X5 on other assets was £25,000. The only assets revalued during the year were the buildings.

   Dividends received amounted to £7,500 and interest received £15,000 during 20X5 both of which had been credited to the statement of comprehensive income.

   The debentures were issued on 1 January 20X5 and all interest due had been paid.

Required

(a)    Prepare the statement of cash flows for the year ended 31 December 20X5 in a form suitable for publication.

(b)    Summarise the main conclusions arising from the cash flow produced for Peak Ltd.

(c)     Comment on the usefulness of the statement of cash flows to users of financial statements.