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Question(s) / Instruction(s):

An extract from the statement of comprehensive income of Raya PLC for the year to 31 May 2010 is shown below, together with the company’s statement of financial position at that date (with comparatives for the previous year)

Statement of comprehensive income (extract) for the year to 31 May 2010

Profit before taxation                         205,600

Taxation                                               (46,980)

Profit after tax                                     158,620

Statement of financial position as at 31 May 2010

 

 

                                                                                                                2010£                                    2009 £

Assets                                                  

Non- current assets                                                       

Property, plant and equipment                                                 285,000                 183,000

Accumulated Depreciation                                                          (151,650)                             (95,160)               

                                                                                                                133,350                 87,840

Investments                                                                                      12,000                                   10,000

Current assets                                                  

Inventories                                                                                         171,220                 133,330

AR                                                                                                          121,630                 86,500

Cash at bank                                                                                      9,710                                     -

Total Assets                                                                                        447,910                 317,670

Equity                                                  

Paid in capital – Common Stock                                                 100,000                 100,000

Paid in capital in excess of par – Common Stock                                 50,000                                   50,000

Retained earnings                                                                           128,610                 39,990

Liabilities                                                             

Non-current liabilities                                                   

11% long term loan                                                                         30,000                                   -

Current liabilities                                                             

Notes Payable owing re PPE                                                       4,000                    

Accounts Payable                                                                            89,370                                   61,530

Tax payable                                                                                        45,930                                   42,660

Bank overdraft                                                                                  -                                              23,490

Total equity and liabilities                                                             447,910                 317,670

1-            The 11% long term loan was issued on 1 December 2009. The first half year’s interest was paid on 31 May 2010. Interest on bank overdraft paid during the year was £ 1,320.

2-            Dividends received during the year were £ 930. Dividends totalling £ 70,000 were paid during the year.

3-            Plant which had cost of £ 22,000 was sold in March 2010 for £ 7,000. The accumulated depreciation on this plant at the time of disposal was £ 16,230. No investments were sold during the year.

Required:

Prepare the cash flow statement for this company for the year to 31 May 2010 using the indirect method.

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