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Question 2:

The following information has been extracted from the draft financial statements of Times Ltd for the year ended 31 December 2018. All figures are expressed in 000s.

Income statement for the year ended to 31 December 2018

Sales	104
Cost of sales	(11)
Gross profit	93
Less: Expenses	(8)
Operating profit	85
Interest expense	(3)
Interest income	2
Gain on disposal of non-current asset	16
Profit before taxation	100
Taxation	(42)
Profit after taxation	58

Balance sheet as at:

	31 December 2018		31 December 2017
Non-current assets		1,468		1,130
Current assets
Inventory	360		140
Trade receivables	246		146
Bank	270		0
Total assets		2,344		1,416
Current liabilities
Overdraft	0		44
Trade payables	750		394
Non-current liabilities
Long-term bank loan	380		280
Equity
Share capital (1)	624		420
Share premium	130		88
Retained earnings	460		190
Total equity and liability		2,344		1,416

Additional information:

1. Depreciation expense incurred was 30,000, and the firm made a purchase of 268,000 of the Non-current Assets.
2. Interest and Taxation

	2018	2017
Interest	18,000	22,000
Taxation	70,000	40,000

3. Times Ltd has received the dividend of 171,000 and paid the dividend of 145,000
4. The book value of the non-current asset has been sold is 60,000

Required:

Use the indirect method to prepare a cash flow statement for the year ending 31 December 2018 in accordance with IAS 7.

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