Required:

a) Prepare a statement of cash flow as at 31 December 2017 for Mensah & Co. Ltd using the indirect method.

b) Differentiate between Direct and Indirect Method of reporting cash flow from operating activities.                   (3 marks)

New World Company Limited is a large manufacturer of electrical goods. You are a trainee accountant working for the company. The following statement of profit or loss and other comprehensive income and statement of financial position extracts relates to New World Company Limited.

Required:
Prepare the statement of cash flows for New World Company Limited for the year ended 31 December 2017. (20 marks)

Below are the statement of financial position for Saasa Company Limited at 31 December 2015 and 31 December 2016 and the income statement for the year ended 31 December, 2016.

Additional information:
i) Deferred development expenditure amortized during 2016 was GH¢25,000.

ii) Additions to property, plant and equipment totaling GH¢167,000 were made. Proceeds from the sale of equipment were GH¢58,000, giving rise to a profit of GH¢7,000. No other items of property, plant and equipment were disposed of during the year.
iii) Finance costs represent interest paid on the new 6% debentures (2016-2022) issued on 1 January 2016.
iv) Current asset investments represent treasury bills acquired. The company deems these to represent cash equivalents.
v) Dividends paid during the year amounted to GH¢65,000.
Required:
Prepare a statement of cash flow for Saasa Company for the year ended 31 December 2016, using the indirect method in accordance with IAS 7: Statement of Cash Flows.                                                                                                         (20 marks)

The Statements of Financial Position for the last two years for AO Ltd are shown below. AO Ltd implemented an expansion programme during the year ended 31st May 2015.

Additional information:
i) The total depreciation provision incorporated in the statements of financial position was GH¢48,000 at 31st May 2014 and GH¢122,000 at 31st May 2015.
ii) During the year ended 31st May 2015 a non-current asset costing GH¢22,000 with a carrying of GH¢6,000 was sold for GH¢1,000. No other disposals took place.

iii) The revaluation surplus, represents a revaluation of premises during the year ended 31st May 2015.
Required:
a) Prepare a Statement of Cash Flow for AO Ltd for the year ended 31st May 2015 in accordance with IAS 7. (Use the indirect method).                                                                                                                                                                            (12 marks)

b) State the effects of the expansion policy on AO Ltd.                                                                                                     (8 marks)