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mirrors.com Question 5 The statements of financial position of Maytix as at 31 October 2005 and 31 October 2004 are as follows: Non-current assets: Property, at cost Plant and equipment, at cost Less accumulated depreciation Current assets: Inventory Trade receivables Bank Capital and reserves: Ordinary shares Share premium Retained earnings Non-current liabilities: 10% loan stock Current liabilities: Trade payables Taxation Bank overdraft Credit sales. Cash sales Cost of sales Gross profit Distribution costs Administration expenses Operating profit Interest on loan stock Loss on disposal of non-current assets Profit before tax Tax Profit after tax $000 Balance at 31.10.2004 Additions Annual charge 4,000 7,390 (1.450) Disposal Balance at 31.10.2005 5,901 2,639 5,000 2,500 2,110 1,237 550 2,333 2005 $000 9,940 8,540 18,480 9,610 4,750 4,120 18,480 $000 3,000 4,182 (1.452) Cost $000 4,182 6,278 4,520 2,233 1,007 2,150 13,490 The statement of comprehensive income of Maytix for the year ended 31 October 2005 is as follows: $000 $000 9,500 1,047 (8,080) 2,467 10,460 (3,070) 7,390 3,500 1,000 3,090 1,700 450 (501) (369) 2004 $000 5,730 Depreciation $000 (1,452) (540) (1,992) 542 (1,450) 7,760 13,490 7,590 3,750 Notes: (1) The 'Statement of changes in equity' disclosed a dividend paid figure of $1,500,000 during the year to 31 October 2005. (ii) The non-current asset schedule revealed the following details: Property: Additions cost $1,000,000. Plant and equipment (870) Statements of cash flows 677 1,597 (425) (102) 1,070 (550) 520 NBV $000 2,730 6,278 (540) 8,468 (2,528) 5,940 Required: (a) Prepare the Cash Flow Statement of Maytix for the year ended 31 October 2005. Use the format required by IAS 7 'Cash Flow Statements' and show operating cash flows using the 'indi- rect method'. (b) Describe the additional information that would be included in a cash flow statement showing operating cash flows using the direct method and discuss the proposition that such disclosures be made compulsory under IAS 7. (The Association of International Accountants)

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