Dolente Ltd is a small company which designs, manufactures and sells innovative electronic instruments. The directors of the company have discussed the financial statements prepared for the year ended 31st March 2020 and have made the following remarks.“We are surprised to see that we have a loss for the year as our bank balance seems to be healthy and has increased from the 2019 figure”.The following are the financial statements of Dolente Ltd for the two years ended 31st March 2020.Required: Prepare a cash flow statement for Dolente Ltd for the year ended 31st March 2020. 20202019Statement of Financial Position as at 31st March£000£000£000£000Non current assetsTangible862820Intangible134996128948Current assetsInventories520488Trade debtors280302Prepayments3846Bank1661,0042141,050Total Assets2,0001,998LiabilitiesCreditors falling due within 1 year800820Creditors falling due after 1 yearLoans46212624261246Equity and reservesOrdinary shares of £1 each600600Share premium5050Retained earnings88738102752Total Liabilities and Equity2,0001,998 Income Statement for the year ended 31st March2020£000Turnover2,480Cost of sales(2,004)Gross profit476Distribution costs(290)Administrative expenses(134)Operating profit52Interest payable(46)Exceptional items(20)Loss before taxation(14)TaxationLoss for the year(14)The following further information is available:(1) Tangible non-current assets:CostAccumulatedNet£000£000£000As at 1st April 20191,242422820Additions, at cost164164Disposals(60)(26)(34)Depreciation for the year88(88)As at 31st March 20201,346484862The assets were sold for cash proceeds of £10,000. Any profit or loss arising is included in the operating profit forthe year.(2) Intangible non-current assets: These are patents on innovative electronic instruments.£000As at 1st April 2019128Purchases40Amortization (in operating profit)(14)Exceptional write down(20)As at 31st March 2020134(3) Prepayments all relate to expenses charged against operating profits.(4) Creditors falling due within one year20202019£000£000Trade creditors786650Accrued interest1410Taxation160800820

Cash Flow Statement: Cash flow statement is financial statement which summarizes the amount of…

Answered: Dolente Ltd is a small company which…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Dolente Ltd is a small company which designs, manufactures and sells innovative electronic instruments. The directors of the company have discussed the financial statements prepared for the year ended 31st March 2020 and have made the following remarks.
“We are surprised to see that we have a loss for the year as our bank balance seems to be healthy and has increased from the 2019 figure”.
The following are the financial statements of Dolente Ltd for the two years ended 31st March 2020.

Required:

Prepare a cash flow statement for Dolente Ltd for the year ended 31st March 2020.

2020
2019
Statement of Financial Position as at 31st March
£000
£000
£000
£000
Non current assets
Tangible
862
820
Intangible
134
996
128
948
Current assets
Inventories
520
488
Trade debtors
280
302
Prepayments
38
46
Bank
166
1,004
214
1,050
Total Assets
2,000
1,998
Liabilities
Creditors falling due within 1 year
800
820
Creditors falling due after 1 year
Loans
462
1262
426
1246
Equity and reserves
Ordinary shares of £1 each
600
600
Share premium
50
50
Retained earnings
88
738
102
752
Total Liabilities and Equity
2,000
1,998

Income Statement for the year ended 31st March
2020
£000
Turnover
2,480
Cost of sales
(2,004)
Gross profit
476
Distribution costs
(290)
Administrative expenses
(134)
Operating profit
52
Interest payable
(46)
Exceptional items
(20)
Loss before taxation
(14)
Taxation
Loss for the year
(14)
The following further information is available:
(1) Tangible non-current assets:
Cost
Accumulated
Net
£000
£000
£000
As at 1st April 2019
1,242
422
820
Additions, at cost
164
164
Disposals
(60)
(26)
(34)
Depreciation for the year
88
(88)
As at 31st March 2020
1,346
484
862
The assets were sold for cash proceeds of £10,000. Any profit or loss arising is included in the operating profit for
the year.
(2) Intangible non-current assets: These are patents on innovative electronic instruments.
£000
As at 1st April 2019
128
Purchases
40
Amortization (in operating profit)
(14)
Exceptional write down
(20)
As at 31st March 2020
134
(3) Prepayments all relate to expenses charged against operating profits.
(4) Creditors falling due within one year
2020
2019
£000
£000
Trade creditors
786
650
Accrued interest
14
10
Taxation
160
800
820

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