a conflict of interest may exist if there is a significant risk that representation 613540

Preparation of a statement of cash flows

Entity E”s statement of financial position as at Dec 31, 01 is presented as follows:

E”s separate income statement for 01 is presented as follows (the line item “other expenses” relates to E”s operating activities and only includes expenses that were paid in cash in 01):

Remarks on the statement of financial position:

(a) On Jan 01, 01, E acquired building 1 (which represents an item of property, plant, and equipment) for CU 300 (payment in cash). The building was available for use on the same day. Its useful life is 30 years.

(b) On Jan 01, 01, E sold building 2 (which represented an item of property, plant, and equipment) for CU 50 (payment in cash). The building”s carrying amount as at Dec 31, 00 was CU 40.

(c) On Dec 31, 01, a truck (property, plant, and equipment) was acquired by means of a finance lease. The carrying amount of the truck as at Dec 31, 01 is CU 20, which is equal to the carrying amount of the lease liability.

(d) The carrying amount of the merchandise was CU 100 on Dec 31, 00 and is CU 50 on Dec 31, 01. In 01, new merchandise was purchased for CU 250. Thereof, CU 230 was paid in cash (“Dr Merchandise Cr Cash CU 230”) and CU 20 was purchased on credit (“Dr Merchandise Cr Trade payable CU 20”). In 01, merchandise with a carrying amount of CU 300 was sold for CU 450 (“Dr Cost of the merchandise sold Cr Merchandise 300” and “Dr Cash Cr Sales revenue 450”).

(e) In 01, E issued shares (“Dr Cash Cr Share capital CU 100”).

(f) The carrying amount of the trade payables was CU 0 on Dec 31, 00 and is CU 20 on Dec 31, 01 (see (d)).

(g) On Dec 31, 01 a provision is recognized for warranties in the amount of CU 10.

(h) On Dec 31, 01 E took out a loan in the amount of CU 50 from its bank.

Required

Prepare E”s statement of cash flows for the year 01. E”s financial statements are prepared as at Dec 31. E presents its cash flows from operating activities according to the indirect method.