Minster is a public limited company. Following are the details of its financial statements for the year ended 30 September 20X6.

i) Included in PPE is a coal mine ans related plant that Minster purchased on 1 October 20X5. Legislation requires that in ten years’ time (estimated life of mine) Minster will have to landscape the affected area. The future costs of this has been estimated and discounted at a rate of 8% to a present value of $150,000. This cost has been included in the carrying amount of the mine. $150,000 added with unwinding of the discount has been treated as provision for the year end. The unwinding of the discount is already included in the finance costs in the Statement of Profit/Loss. 

Other land was revalued upward by $35,000 during the year.

Depreciation of property, plant and equipment for the year was $255,000.

There were no disposals.

The software was purchased on 1 April 20X6 for $180,000.

ii) On 1 April 20X6, there was a bonus issue of equity shares of one for every four held, utilizing the share premium. A further cash share issue was made on 1 June 20X6. No shares were redeemed during the year.

iii) A dividend of 5 cents per share was paid on 1 July 20X6.

a. Prepare a statement of cash flows for Minster for the year to 30 September 20X6 in accordance with IAS 7.

b. Comment on Minster’s cash flows.

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BT Statement of Financial Position at 30 September 20X6 20X5 $00 $000 Non-current Assets Property, plant & equipment 1,430 1,065 Intangible 135 1,565 1,065 Current assets Inventory 480 510 Receivables 270 380 Prepayments 80 55 Bank 35 830 980 Total Assets 2,395 2,045 Equity & Liabilities Capital & reserves Equity shares of 25 cents each 500 300 Share Premium 150 85 Revaluation Surplus 60 25 Retained earnings 950 965 1,660 1,375 Non-current liabilities Finance lease payables 10 30 9% loan notes 110 Environmental Provision 162 282 30 Current liabilities Bank overdraft 25 40 Trade payable 300 470 Finance lease payables 50 55 Income tax 78 75 453 640 Total equity & liabilities 2,395 2,045 Statement of Profit or loss for the year ended 30 September 20X6 $000 Revenue 1,397 cost of sales (1,110) gross profit operating expenses 287 (125) 162 Finance costs (40) Investment income 20 Profit before tax 142 Taxation (57) Profit for the year 85 BT Statement of Financial Position at 30 September 20X6 20X5 $00 $000 Non-current Assets Property, plant & equipment 1,430 1,065 Intangible 135 1,565 1,065 Current assets Inventory 480 510 Receivables 270 380 Prepayments 80 55 Bank 35 830 980 Total Assets 2,395 2,045 Equity & Liabilities Capital & reserves Equity shares of 25 cents each 500 300 Share Premium 150 85 Revaluation Surplus 60 25 Retained earnings 950 965 1,660 1,375 Non-current liabilities Finance lease payables 10 30 9% loan notes 110 Environmental Provision 162 282 30 Current liabilities Bank overdraft 25 40 Trade payable 300 470 Finance lease payables 50 55 Income tax 78 75 453 640 Total equity & liabilities 2,395 2,045 Statement of Profit or loss for the year ended 30 September 20X6 $000 Revenue 1,397 cost of sales (1,110) gross profit operating expenses 287 (125) 162 Finance costs (40) Investment income 20 Profit before tax 142 Taxation (57) Profit for the year 85