The statements of financial position of Lochnagar Ltd for the past two years and the company's most recent income statement are set out below.

Income statement for the year to 31 October 2018.

? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??000Revenue.................................................................................... 22,400Cost of sales............................................................................(12,320)? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ??????Gross profit.............................................................................. 10,080Gain on disposal of property, plant and equipment................ 224Distribution costs..................................................................... (4,704)Administrative expenses......................................................... (2,240)Finance costs ? interest on loans............................................... (91)? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?????Profit before tax........................................................................ 3,269Tax expense............................................................................. (1,344)? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?????Profit for the year.......................................................................1,925? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ?????

Statements of financial position at 31 October.

The following information is also available in relation to the year to 31 October 2018:

(a) The total depreciation charge for the year was ?3,545,000.

(b) Property, plant and equipment costing ?976,000 with accumulated depreciation of ?355,000 was sold during the year at a profit of ?224,000.

(c) All sales and purchases were on credit. Other expenses were paid for in cash.

(d) No dividends were paid during the year.

Required:

Prepare a statement of cash flows for Lochnagar Ltd for the year to 31 October 2018, in accordance with the requirements of accounting standard IAS7 and using the indirect method.

Transcribed Image Text:

2017 £000 2018 £000 £000 £000 Assets Non-current assets Property, plant and equipment 25,171 24,100 Current assets Inventories 3,696 3,360 2,464 2,464 129 Trade and other receivables Cash and cash equivalents 7,056 5,057 Total assets 32,227 29,157 Equity Share capital Share premium account Retained eamings 2,200 2,000 80 500 24,990 23,065 27,990 25,565 Liabilities Non-current liabilities Bank loans 1,300 800 Current liabilities Trade and other payables Current tax liability 1,232 1,344 361 1,848 944 Bank overdraft 2,937 2,792 Total equity and liabilities 32,227 29,157