Financial Reporting and Ethics - The Institute of Chartered ...

FINANCIAL REPORTING AND ETHICSN’000 N’000 N’000 N’000Capital and Reserves:Issued Share Capital of 1.00 each 5,000 3,000Share Premium 1,000 --Retained Profits 1,750 1,9007,750 4,900Long-term liabilities:Long-term loans 3,000 1,000Current Liabilities:Bank Overdraft 930__Trade Creditors 3,100 2,150Current Tax Payable 220 4,250 450 2,60015,000 8,500Cash Flow Statement for the year ended 30th September 2008:N ’000 N’000Cash flow from operating activities:Operating Profit 1,000Adjustments for:Depreciation 3,800Loss on disposal of fixtures 1,250 5,050Operating profit before working capital changes: 6,050Increase in Stock (1,400)Increase in trade debtors (50)Increase in trade creditors 950 (500)Income Tax Paid (480)Net cash from operating activities 5,070Cash flow from Investing Activities:Purchase of property, plant and equipment (10,500)Disposal costs of fixture (50) (10,550)Net cash flow from investing activities (5,480)Cash flow from financing Activities:Issue of Ordinary Shares 3,000Interest paid (300)Long-term loans 2,000Ordinary Dividend paid (600) 4,100Net decrease in cash and cash equivalents (1,380)Cash and Cash equivalents at beginning of the year 450Cash and Cash equivalents at the end of the year (930)The following information is relevant:(i)(ii)The directors have signalled their intention to maintain annual dividends atN600,000for the foreseeable future.The increase in property, plant and equipment was due to the acquisition of fivenew stores and the refurbishment of some existing stores during the year. Thecarrying value of fixtures scrapped at the refurbished stores was N 1.2 million;they had originally cost N3million. Karsashi Plc received no scrap proceeds fromthe fixtures, but did incur costs of N50,000 to remove and dispose of them. Thelosses on the refurbishment have been charged to operating expenses. Depreciationis charged to cost of sales apportioned in relation to floor area (see below).278