Magpie plc
The following are draft financial statement extracts for Magpie plc for the year ended
31 December 20X9.
Statement of profit or loss for the year ended 31 December 20X9
Operating profit 675,000
Finance costs (21,000)
Profit before tax 654,000
Income tax (204,000)
Profit for year 450,000
Statements of financial position as at 31 December
20X9 20X8
£ £
ASSETS
Non-current assets
Property, plant and equipment 2,995,000 2,703,000
Intangible assets 190,000 140,000
Investments 90,000 –
Current assets
Inventories 395,000 372,000
Trade receivables 290,000 310,000
Cash and cash equivalents 369,000 133,000
Total assets 4,329,000 3,658,000
EQUITY AND LIABILITIES
Equity
Equity share capital (50p shares) 900,000 800,000
Share premium 410,000 400,000
Retained earnings 2,091,000 1,641,000
Non-current liabilities
Preference share capital (redeemable) 100,000 –
Borrowings 230,000 320,000
Current liabilities 598,000 497,000
Total equity and liabilities 4,329,000 3,658,000
Additional information
(1) On 1 January 20X9 Magpie plc made a 1 for 10 bonus issue of equity shares from share
premium followed by a separate issue of shares for cash.
(2) On 31 December 20X9 Magpie plc issued the redeemable preference shares at par.
(3) Borrowings of £90,000 were repaid using funds raised from the issue of the preference
shares.
(4) Current liabilities comprise the following balances:
20X9 20X8
£ £
Tax liability 223,000 235,000
Trade payables 272,000 180,000
Accruals 103,000 82,000
598,000 497,000
(5) The trade payables at 31 December 20X9 include an amount of £35,000 in respect of a
purchase of a new motor vehicle in the year. All other property, plant and equipment
purchases were paid for during the financial year.
(6) Included in accruals at 31 December 20X9 is accrued interest of £21,000. The
corresponding figure for 20X8 is £23,000.
(7) Depreciation for the year ended 31 December 20X9 was £302,000.
(8) Operating profit includes a profit of £3,000 in respect of the disposal of a motor vehicle in
the year (the only disposal of the year). This motor vehicle had a carrying amount of
£11,000 at the disposal date. Motor vehicles are included within property, plant and
equipment.
(9) Intangible assets costing £80,000 were purchased for cash during the year. There were
no disposals of intangible assets. However, following an annual impairment review the
recoverable amount of intangible assets was deemed to have fallen by £10,000. The
impairment loss was recognised in administration expenses.
Requirement
Prepare a statement of cash flows for the year ended 31 December 20X9 in accordance
with IAS 7.
Magpie plc
Statement of cash flows for the year ended 31 December 20X9
£
Cash flows from operating activities
Profit before tax
Finance costs
Depreciation
Amortisation of intangible assets
Impairment charge
Gain/loss on sale of property, plant and equipment
Movement in inventories
Movement in trade receivables
Movement in trade payables
Movement in accruals
Cash generated from operations
Tax paid
Interest paid
Net cash from/used in operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of investments
Proceeds from sale of property, plant and equipment
Net cash from/used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Movement in borrowings
Net cash from/used in financing activities
Net increase/decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
