Total mark 40

Extracts from the financial statements for Roxy plc for the years ended 30 June are as follows:
Statements of financial position as at 30 June
20X8 20X7
 £  £  £
ASSETS
Non-current assets
  Property, plant and equipment  20,750

Current assets
  Inventories  16,000  11,000
  Trade and other receivables  9,950  2,700
  Government bonds     1,000   1,300
 26,950
Total assets  47,700
EQUITY AND LIABILITIES
Equity
  Ordinary share capital  3,500
  Retained earnings  13,950
 17,450
Non-current liabilities
  Loans  6,000
Current liabilities
Bank overdrafts  12,000  –
Trade and other payables  8,000  11,000
Accruals  700  200
Provision 1,750 –
  Tax liabilities   1,800   1,000
 24,250
 47,700
Statements of profit or loss for the year ended 30 June (extracts)
 20X8   20X7 
 £      £    
Profit from operations 13,650  5,900
Finance cost   (1,000)  (1,400)
Profit before tax  12,650  4,500
Income tax expense   (2,000)  (1,500)
Profit for the year  10,650   3,000

Additional information
(1) An analysis of property, plant and equipment shows the following.
20X8 20X7
 £  £  £
Building
Cost 22,000 12,000
Depreciation   (4,000)  (1,000)
 18,000
Plant and machinery
  Cost 5,000 5,000
  Depreciation  (2,250)  (2,000)
  2,750
  20,750
(2) Machinery with a carrying amount of £250 was sold at the beginning of 20X8 for £350. This machinery had originally cost
 (3) The accruals are in respect of interest payable.
(4) During the year a bonus issue of 1 for 6 was made on the ordinary shares in issue at 30 June 20X7, utilising retained profi
(5) The government bonds are highly liquid and management has decided to classify them as cash equivalents.
(6) Included in trade payables at 30 June 20X8 is £2,500 in respect of the purchase of non-current assets.
(7)The provision relates to a former employee's unfair dismissal claim.
Requirement
Prepare a statement of cash flows for the year ended 30 June 20X8 in accordance with IAS 7, Statement of Cash Flows
Roxy plc
Statement of cash flows for the year ended 30 June 20X8
£
Cash flows from operating activities
Profit before tax 12650
Finance costs 1000
Depreciation 4,000
Gain / loss on sale of property, plant and equipment (100)
Movement in inventories (5,000)
Movement in trade receivables (7,250)
Movement in trade payables (5,500)
Movement in provisions 1,750
Cash generated from operations 1,550
Income tax paid (1,200)
Interest paid (500)
Net cash from / used in operating activities (150)

Cash flows from investing activities

Purchase of property, plant and equipment (8,500)
Proceeds from sale of property, plant and equipment 350
Net cash from / used in investing activities (8,150)

Cash flows from financing activities

Movement in borrowings (4,000)
Net cash from / used in financing activities (4,000)

Net increase / decrease in cash and cash equivalents (9,700)

Cash and cash equivalents at beginning of year 1300
Cash and cash equivalents at end of year -11000
 20X7
 £

 14,000

 15,000
 29,000

 3,000
 3,800
 6,800

 10,000

 12,200
 29,000

20X7
 £

  11,000

    3,000
  14,000
This machinery had originally cost £1,000.
 June 20X7, utilising retained profits.
as cash equivalents.
current assets.

7, Statement of Cash Flows.