The following information has been taken from the financial statements for Payne plc (Payne) for the year ended 31 March 2013.

*Statement of Profit or Loss and Other Comprehensive Income (extracts) for year ended 31 March 2013:

.......................................................................... €000

Profit before interest and tax ........................................ 981

Finance costs ........................................................ (108)

Profit before tax ...................................................... 873

Income tax expense ................................................ (305)

Profit for the year .................................................... 568

Other comprehensive income

Revaluation surplus on property, plant and equipment ........ 418

Total comprehensive income ...................................... 986

Statements of Financial Position as at 31 March

Statement of Changes in Equity for the year ended 31 March 2013 (extract)

* In June 2011, the IASB issued amendments to IAS 1 Presentation of Financial Statements. One of these proposed the adoption of the title Statement of Profit or Loss and Other Comprehensive Income for the performance statement. The title Statement of Comprehensive Income could have been used above.
The following additional information is relevant:
(i) During the year Payne issued both ordinary shares and redeemable preference shares for cash. The latter were issued at par.
(ii) Investments classified as current assets are held for the short term and are readily convertible into the stated amounts of cash on demand.
(iii) During the year, Payne sold plant and equipment with a carrying amount of €840,500 for €900,000.
Total depreciation charges for the year amounted to €1,100,000. Plant costing €50,000 was purchased on credit. The amount is included within trade and other payables.
(iv) Trade and other payables include accrued interest of €5,000 as at 31 March 2013 (2012: €10,000).
(v) Intangibles relate to development costs capitalized in accordance with IAS 38 Intangible Assets. Costs amounting to €70,000 were capitalized during the year.
Required:
(a) Prepare a Statement of Cash Flows for Payne for the year to 31 March 2013 in accordance with IAS 7 Statement of Cash Flows.
(b) You have been provided with the following additional information in relation to Payne's trading performance for the years ended on the stated dates:
__________________ 31/3/2013 __________ 31/3/2012
.............................. €000 ...................... €000
Revenue .................. 3,400 ..................... 2,800
Cost of sales ............ (2,040) ................... (1,400)
Operating expenses ... (379) ..................... (357)
Write a report concisely analyzing the cash flow, profitability and working capital management of Payne Ltd during the year ended 31 March 2013. Your report should be supported by appropriate ratios.
(Institute of Certified Public Accountants (CPA) Professional Stage 1 Corporate Reporting Examination, April 2013)

Transcribed Image Text:

2012 2013 €000 €000 ASSETS Non-current assets: 1| 250 Property, plant and equipment Intangibles 10,500 500 452 11,750 10,952 Current assets: Inventories 840 1,125 Trade and other receivables 260 210 Investments 38 18 Cash and cash equivalents 30 1,143 1,383 12,335 Total assets 12,893 EQUITY AND LIABILITIES Equity: Ordinary share capital Share premium account Revaluation surplus Retained earnings 6,000 1,800 5,250 1,425 750 356 2,011 3,369 10,561 10,400 Non-current liabilities Preference share capital (redeemable) 760 600 Current liabilities: Trade and other payables 222 210 600 525 Taxation Ordinary dividend payable 750 600 1,572 12,893 1,335 12,335 Total equity and liabilities Revaluation Surplus Retained Earnings €'000 3,369 (1,950) €'000 356 Balance at I April 2012 Dividends declared Total comprehensive income for the year Transfer from revaluation surplus to retained earnings Balance at 31 March 2013 418 568 24 (24) 750 2,011