The following information has been taken from the financial statements for Payne plc (Payne) for…
The following information has been taken from the financial statements for Payne plc (Payne) for the year ended 31 March 2013.
(i) During the year Payne issued both ordinary shares and redeemable preference shares for cash. The latter were issued at par.
(ii) Investments classified as current assets are held for the short term and are readily convertible into the stated amounts of cash on demand.
(iii) During the year, Payne sold plant and equipment with a carrying amount of €840,500 for €900,000. Total depreciation charges for the year amounted to €1,100,000. Plant costing €50,000 was purchased on credit. The amount is included within trade and other payables.
(iv) Trade and other payables include accrued interest of €5,000 as at 31 March 2013 (2012: €10,000).
(v) Intangibles relate to development costs capitalised in accordance with IAS 38 Intangible Assets. Costs amounting to €70,000 were capitalised during the year.
(a) Prepare a Statement of Cash Flows for Payne for the year to 31 March 2013 in accordance with IAS 7 Statement of Cash Flows.
(b) You have been provided with the following additional information in relation to Payne’s trading performance for the years ended on the stated dates:
Write a report concisely analysing the cash flow, profitability and working capital management of Payne Ltd during the year ended 31 March 2013. Your report should be supported by appropriate ratios.