2 Land was revalued to 65000 There was no acquisition or dis

2. Land was revalued to £65,000. There was no acquisition or disposal of land during the year. 3. Plant and machinery costing E33,000 were sold 4. No buildings were sold during the year An ordinary dividend of E11,000 and a preference dividend of E9,750 proposed by the directors. These were approved by the shareholders and during the year 5. were paid 6. The preference shares carry no specific maturity date and the pa payment of dividends is discretionary. Required: Construct a Statement of Cash Flows for Geoffrey Ltd. for the year ended 31 December 2016. You should use the indirect method and follow the format as per IAS 7. [15 marks]

Solution

GEOFFREY LIMITED

Statement of Cash flow for the year ended 31st December 2016

   £ £

Cash flow from operating activities - -

Cash flow from investing activities   

Proceeds from sale of Plant and Machinery 33,000

Net casg flow from investing activity 33,000

Cash flow from Financing activities

Dividends paid 11,000

Preference dividend paid 9,750

Net cash flow from financing activity 20,750

Net increase in cash and cash equivalents 53,750

cash and cash equivalents at the beginning of the year -

Cash and cash equivalents at the end of the year 53,750

Note- No adjustment of Land revalued as there is neither cash inflow nor cash outflow.