Question 2.

Use the information below to prepare a statement of cash flow using the indirect method.

1) Unicorn Ltd. Comparative Statements of financial position as at December 31^st 2020 (all amounts in thousands of pounds, ,000)

	2020	2019
ASSETS	,000	,000
Land	150,000	140,000
Buildings	400,000	400,000
Accumulated depreciation-buildings	(42,000)	(22,000)
Equipment	386,000	136,000
Accumulated depreciation-buildings	(56,000)	(20,000)
Prepaid expenses	8,000	12,000
Inventory	108,000	0
Accounts receivable	136,000	52,000
Cash	108,000	74,000
	1,198,000	772,000
EQUITY AND LIABILITES
Share capital-ordinary (1 par value)	440,000	120,000
Retained earnings	412,000	272,000
Bonds payable	280,000	300,000
Accounts payable	46,000	80,000
Accrued expenses payable	20,000	0
	1,198,000	772,000

2) Unicorn Ltd. Income Statement for the year ended at December 31^st 2020 (all amounts in thousands of pounds, ,000)

	2020
	,000
Sales revenue	1,780,000
Cost of goods sold	930,000
Operating expenses	442,000
Interest expense	24,000
Loss on disposal of plant assets	4,000
Income before income taxes	380,000
Income tax expense	130,000
Net income	250,000

3) Additional information (all amounts in thousands of pounds, ,000):

1. Operating expenses include depreciation expense of 66,000.
2. Equipment with a cost of 82,000 and a book value of 72,000 was sold for 68,000 cash.
3. Land was sold at its book value for cash
4. Interest expense of 24,000 was paid in cash.
5. Equipment with a cost of 332,000 was purchased for cash
6. Bonds of 20,000 were redeemed at their face value for cash
7. Ordinary shares (1 par value) of 260,000 were issued for cash.
8. Cash dividends of 110,000 were declared and paid in 2020
9. Ordinary shares of 60,000 were issued in exchange for land

REQUIRED: COMPLETE A AND B FOR 20 MARKS

A) Prepare the Unicorn Ltd. Statement of Cash Flows Indirect method for the year ended at December 31^st 2020 (all amounts in thousands of pounds, ,000)

B) Show all your workings briefly on the sales of land in the cash flows from investing activities.