Buttons Limited

The following is an extract from the financial statements of Buttons Ltd for the year ended
30 September 2009.

Buttons Limited
Statement of Comprehensive Income for year ended 30 September 2009
R
Operating profit 4,657,500
Other operating income 1,700,000
Profit on sale of equipment 300,000
Profit on expropriation of land 1,400,000
Other operating expenses (2,540,000)
Depreciation 2,530,000
Loss on scrapping of machinery 10,000
Profit from operations 3,817,500
Investment income - dividends 20,000
Interest on debentures (15,000)
Profit before tax 3,822,500
Income tax (1,721,000)
Net profit after tax 2,101,500

Buttons Limited
Statement of Financial Position as at 30 September 2009
R R
Assets 2009 2008
Non-current assets 7,450,000 5,850,000
Property, plant and equipment 6,450,000 5,100,000
Investments at costs 1,000,000 750,000
Current Assets 7,000,000 6,000,000
Stock 4,000,000 3,000,000
Debtors 2,000,000 1,500,000
Cash and cash equivalents 1,000,000 1,500,000
Total Assets 14,450,000 11,850,000

Equity and liabilities

Equity and reserves 8,950,000 5,100,000
Issued capital 6,250,000 4,500,000
Reserves 1,150,000 -
Retained earnings 1,550,000 600,000
Non-current liabilities 1,700,000 2,550,000
Debentures 1,500,000 2,500,000
Other interest bearing borrowings 200,000 50,000
Current liabilities 3,800,000 4,200,000
Creditors 2,300,000 3,200,000
SARS 1,500,000 1,000,000
Total equity and liabilities 14,450,000 11,850,000
Further information at 30 September 2009

1. The company had sales of R42 345 600 for the year ended 30 September 2009. Cost
of sales amounted to 78% of this amount.

2. Property, plant and equipment consists of:

2009 2008
Machinery & equipment
Cost 6,300,000 5,500,000
Accumulated depreciation (4,090,000) (3,500,000)
Book Value 2,210,000 2,000,000
Land & buildings
Cost 3,100,000
Revalued cost 4,380,000
Accumulated depreciation (140,000)
Book Value 4,240,000 3,100,000
Total 6,450,000 5,100,000

3. Land and buildings with a cost of R570 000 was expropriated during the year. New
buildings were completed for expansion of operations and taken into use during the
year. On 1 October 2008 the land and buildings were re-valued.
4. A machine having a cost of R1 700 000 and accumulated depreciation of R1 000 000
was sold during the year. A machine with a cost amount of R810 000 was scrapped.
5. Purchase of equipment was for expansion purposes.

6. Issued share capital comprises:

2009 2008
Ordinary share capital 1,800,000 1,500,000
Preference share capital 4,450,000 3,000,000
6,250,000 4,500,000

7. The authorised share capital of the company comprises of 2 000 000 ordinary no par
value shares and 6 000 000 8% non-cumulative no par value preference shares.
During the year the company issued 150 000 ordinary shares at R2 each to raise
funds to partially finance the increase in buildings and equipment. In addition, the
company issued 1 000 000 8% non-cumulative preference shares at R1,45 each to
finance the redemption of debentures.

8. Prior to the redemption, dividends of R151 500 were declared and paid.

9. Reserves comprise the following:

2009 2008
R R
Revaluation reserve 150,000
General reserve 1,000,000
1,150,000 -

Required: Prepare the statement of cash flow according to the direct method, with notes, for
the year ended 30 September 2009 in accordance with IFRS.