Question

Prepare the cash flow statement (according to IFRS standards) for Stonechat plc for the year ended 31December Year 7. Stonechat plc’s income statement for the year ended 31 December Year 7 and thebalance sheet as at 31 December Year 6 and Year 7 are as follows. (12 points)

Income statement for the year ended 31 December Year 7

	€m
Revenue	623
Cost of sales	(353)
Gross profit	270
Distribution expenses	(71)
Administrative expenses	(30)
Rental income	27
Operating profit	196
Interest payable	(26)
Profit before taxation	170
Taxation	(36)
Profit for the year	134

Balance sheets as at 31 December Year 6 and Year 7

	Year 6	Year 7
ASSETS	€m	€m
Non-current assets
Property, plant and equipment
Land and buildings	310	310
Plant and machinery	325	314
	635	624
Current assets
Inventories	41	35
Trade receivables	139	145
	180	180
Total assets	815	804
EQUITY AND LIABILITIES
Equity
Share capital	200	300
Share premium	40	–
Reserves – retained earnings	192	206
	432	506
Non-current liabilities
Borrowings – loan notes	250	150
Current liabilities
Borrowings (all bank overdraft)	56	89
Trade payables	54	41
Taxation	23	18
	133	148
Total equity and liabilities	815	804

• During Year 7, the business spent €67 million on additional plant and machinery.
• There were no other non-current asset acquisitions or disposals.
• There was no share issue for cash during the year. (There was a bonus issue of ordinary shares during theyear, but a bonus issue of ordinary shares has no cash flow effect.)
• A dividend of €60 million was paid.

Answer 1