Reference no: EM13500711

The income statements and balance sheets for the years ended 30 September 2009 and 2008 of McAllister Ltd are shown below:

 

	Year to 30 September 2009	Year to 30 September 2008
	€'000	€'000
Sales	14,250	13,100
Cost of sales	(4,000)	(3,800)
Gross profit	10,250	9,300
Expenses	(6,330)	(5,400)
Operating profit	3,920	3,900
Interest payable	(600)	(780)
Profit before tax	3,320	3,120
Taxation	(1,280)	(1,030)
Profit after tax	2,040	2,090

 

	30 September 2009		30 September 2008
	€'000	€'000	€'000	€'000
Property, plant and equipment
Cost	14,950		14,735
Depreciation	(4,300)	10,650	(3,500)	11,235
Current Assets
Inventory	2,000		1,555
Trade Receivables	2,300		1,650
Cash	80		-
		4,380		3,205
Current liabilities
Trade and other payables	1,120		2,100
Bank Overdraft	-		250
Taxation	120		80
		1,240		2,430
Net current assets		3,140		775
Total assets less current liabilities		13,790		12,010
Long term loan	4,350		4,810
Net assets		9,440		7,200
Capital and Reserves
€1 ordinary shares	3,200		3,000
Retained profit	6,240		4,200
		9,440		7,200

 

Notes:

• During the year to 30 September 2009, a piece of equipment was sold for €20,000. The item had an original cost of €35,000 and McAllister Ltd made a loss on disposal of €10,000.

 

• During the year to 30 September 2009, a production line was purchased for €250,000. However, the amount remained outstanding at the year end, and is included in the trade and other payables figure on the balance sheet. There were no other payables in 2008.

 

• There were no amounts outstanding for interest payable at the 2008 or 2009 balance sheet dates.

Requirement:

a)      Produce a cash flow statement for the year ended 30 September 2009, ensuring that the structure of your statement is in accordance with IAS7 and that you show your workings clearly.

b)      There are two methods for the presentation of cash generated from operations.  Describe the key features of each method and their relative advantages and disadvantages.