The following information has been extracted from the draft financial statements of T plc:
|
£000 |
|
|
Sales |
15000 |
|
Cost of sales |
(9000) |
|
6000 |
|
|
Other operating expenses |
(2400) |
|
3600 |
|
|
Interest |
(24) |
|
Profit before taxation |
3576 |
|
Taxation |
(1040) |
|
Dividends |
(1100) |
|
1436 |
|
|
Balance brought forward |
4400 |
|
5836 |
T plc
Balance sheets at 30 September
|
2001 |
2000 |
||||||
|
£000 |
£000 |
£000 |
£000 |
||||
|
Fixed assets |
18160 |
14 500 |
|||||
|
Current assets: |
|||||||
|
Stock |
1600 |
1100 |
|||||
|
Debtors |
1500 |
800 |
|||||
|
Bank |
150 |
1200 |
|||||
|
3250 |
|||||||
|
Current liabilities: |
|||||||
|
Creditors |
(700) |
(800) |
|||||
|
Proposed dividend |
(700) |
(600) |
|||||
|
Taxation |
(1040) |
(685) |
|||||
|
(2440) |
(2085) |
||||||
|
Net current assets |
810 |
1015 |
|||||
|
18970 |
15515 |
||||||
|
Net current assets |
(1700) |
(2900) |
|||||
|
17270 |
12615 |
||||||
|
Deferred tax |
(600) |
(400) |
|||||
|
16670 |
|||||||
|
Ordinary share capital |
2500 |
2000 |
|||||
|
Share premium |
8334 |
5815 |
|||||
|
Profit and loss |
5836 |
4400 |
|||||
|
16670 |
12215 |
||||||
|
Land and buildings |
Plant and machinery |
Total |
|||||
|
£000 |
£000 |
£000 |
|||||
|
Cost |
|||||||
|
30 September 2000 |
8400 |
10800 |
19200 |
||||
|
Additions |
2800 |
5200 |
8000 |
||||
|
Disposals |
– |
(2600) |
(2600) |
||||
|
30 September 2001 |
11200 |
13400 |
24600 |
||||
|
Depreciation |
|||||||
|
30 September 2000 |
1300 |
3400 |
4700 |
||||
|
Disposals |
– |
(900) |
(900) |
||||
|
Charge for year |
240 |
2400 |
2640 |
||||
|
30 September 2001 |
1540 |
4900 |
6440 |
||||
|
Net book value |
|||||||
|
30 September 2001 |
9660 |
8500 |
18160 |
||||
|
30 September 2000 |
7100 |
7400 |
14500 |
||||
The plant and machinery that was disposed of during the year was sold for £730 000.
Required
(a) Prepare T plc’s cash flow statement and associated notes for the year ended 30 September 2001. These should be in a form suitable for publication.
After the publication of the balance sheet at 30 September 2000, the directors of T plc were criticised for holding too much cash. The annual report for the year ended 30 September 2001 claims that the company has managed its cash more effectively.
Required
(b) Explain whether T plc’s cash management appears to have been any more effective this year.