The Statements of financial position of Paddles plc are shown. You are informed as follows:

(i) There was no disposal of noncurrent assets in the year.

(ii) A dividend of £30,000 was paid in October 2011.

(iii) Debenture interest of £36,000 was paid in the year.

(iv) Tax on current year’s profit has been accounted for at £82,000.

Required:

(a) Prepare a Statement of cash flows for 2011.

(b) Make three comments on the information provided by the Statement of cash flows.

Note: The question does not include a Statement of income. In the absence of information on sales, purchases and expenses it is impossible to prepare the Statement of cash flows on the direct method. To prepare the Statement on the indirect method, we need the figure of operating profit and to get that figure we need to prepare a Statement of income based on the information provided.

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Statements of financial position as at 31 December 2010 £'000 £'000 £'000 £'000 Non-current assets: 720 820 Accumulated depreciation (242) 478 (258) Investments 180 Current assets: Inventory Trade receivables Cash and bank 590 332 11 2011 933 1,591 407 392 4 562 240 803 1,605