The statements of financial position for 2023 and 2022 for Hull PLC and extracts from the statement of financial performance for 2023 for Hull PLC are presented below:

Hull Plc: Statements of financial position at 31 December	2023	2022
ASSETS
Non-current assets
Plant property and equipment at cost	1,596,000	1,560,000
Less: Accumulated depreciation	Total(318,000)	Total(224,000)
Property plant and equipment at net book value	1,278,000	1,336,000
Current assets
Inventory	24,000	20,000
Receivables	66,000	53,000
Prepayments	10,000	5,000
Cash and cash equivalents	Total48,000	Total56,000
Total current assets	Total148,000	Total134,000
Total assets	Total1,426,000	Total1,470,000
EQUITY AND LIABILITIES
Share capital and reserves
Ordinary shares (nominal value per share = 1.00)	360,000	340,000
Ordinary share premium	36,000	24,000
Retained earnings	Total686,000	Total490,000
Total equity and reserves	Total1,082,000	Total854,000
Liabilities
Non-current liabilities: Debentures	Total200,000	Total500,000
Current liabilities
Payables	40,000	22,000
Accruals	2,000	8,000
Corporation tax payable	Total102,000	Total86,000
Total current liabilities	Total144,000	Total116,000
Total liabilities	Total344,000	Total616,000
Total equity and liabilities	Total1,426,000	Total1,470,000

Hull PLC

Extract of the Statement of financial performance for the year ended 31 December 2023

Profit before interest and taxation	420,000
Finance income	10,000
Finance cost	Total(38,000)
Profit before taxation	392,000
Corporate taxation	Total(124,000)
Profit for the year	Total268,000

The following notes are relevant.

During the year, items of property, plant and equipment were sold. The original cost of these items was 54,000, and the accumulated depreciation on the date of disposal was 24,000. The sale proceeds were 12,000.

Hull PLC'S statement of changes in equity (Extract) for the year ended 31 December 2023 is also presented:

Retained earnings
Balance as at 1 January 2023	490,000
Dividends paid	( 72,000)
Total income for the year	Total268,000
Balance as at 31 December 2023	Total686,000

Finance cost and income relate to interest only.

Required

a.Prepare the reconciliation of profit before tax to net cash flow generated from (or used in) operating activities for Hull PLC for the year ended 31 December 2023, using the indirect method.

b.Prepare the cash flow statement for Hull PLC for the year ended 31 December 2023 (in accordance with IAS7).

c.Comment on the overall cash position of the company and the operating, investing and financing activities of Hull PLC as presented in the cash flow statement.

Answer rating: 100% (QA)

Here are the answers to the questions a Reconciliation of profit before tax to net cash flow from op... View the full answer