Question

QUESTION 1

On 1st October 2017, Sugar Limited acquired 90% of Salt limited by issuing 100 000 shares at an agreed value of N$1.60 per share and N$ 140 000 in cash.

At that time, the Statement of Financial Position of Salt Limited was as follows:

N$ 000

Property plant and equipment 190

Inventories 70

Trade receivables 30

Cash and cash equivalent 10

Trade payables (40)

Total 260

The Consolidated Statements of Financial Position of Sugar Limited as at 31 December were as follows:

2017 2016

N$000 N$ 000

Non-current assets

Property, plant and equipment 2 500 2 300

Goodwill 66 0

Total 2 566 2 300

Current assets

Inventories 1 450 1 200

Trade receivables 1 370 1 100

Cash and cash equivalents 16 50

Total 2 836 2 350

Total Assets 5 402 4 650

Equity attributable to equity holders of the parent

Share capital (N$ 1 ordinary share) 1 150 1 000

Share premium account 590 500

Retained earnings 1 791 1 530

3 531 3 030

Non- controlling interest 31 0

3 562 3 030

Current liabilities

Trade payables 1 690 1 520

Income tax payable 150 100

1 840 1 620

Total equity and liabilities 5 402 4 650

The Consolidated Statement of Profit or Loss for the year ended 31 December 2017 was as follows:

Revenue 10 000

Cost of sales (7 500)

Gross profit 2 500

Administrative expenses (2 080)

Profit before tax 420

Income tax expense (150)

Profit for the period 270

Attributable to:

Equity holders of the parent 261

Non- controlling interest 9

270

You are also given the following information:

1. All the subsidiary are wholly owned

2. Depreciation charged to the consolidated income statement amounted to

N$210 000

3. There were no disposals of property, plant and equipment during the year

4. No dividend were paid by the parent company

Required

Prepare a Consolidated Statement of Cash flows for the year ended 31 December 2017 under the indirect method in accordance with IAS 7.

On 1st October 2017, Sugar Limited acquired 90% of Salt limited by issuing 100 000 shares at an agreed value of N$1.60 per share and N$ 140 000 in cash.
At that time, the Statement of Financial Position of Salt Limited was as follows:
N$ 000
Property plant and equipment 190
Inventories 70
Trade receivables 30
Cash and cash equivalent 10
Trade payables (40)
260
The Consolidated Statements of Financial Position of Sugar Limited as at 31 December were as follows:
2017 2016
N$000 N$ 000
Non-current assets
Property, plant and equipment 2 500 2 300
Goodwill 66 0
Total 2 566 2 300
Current assets
Inventories 1 450 1 200
Trade receivables 1 370 1 100
Cash and cash equivalents 16 50
2 836 2 350 Total Assets 5 402 4 650

Equity attributable to equity holders of the parent
Share capital (N$ 1 ordinary share) 1 150 1 000
Share premium account 590 500
Retained earnings 1 791 1 530 Total 3 531 3 030
Non- controlling interest 31 0
Total 3 562 3 030
Current liabilities
Trade payables 1 690 1 520
Income tax payable 150 100
Total Current 1 840 1 620
Total equity and liabilities 5 402 4 650
The Consolidated Statement of Profit or Loss for the year ended 31 December 2017 was as follows:
Revenue 10 000
Cost of sales (7 500)
Gross profit 2 500
Administrative expenses (2 080)
Profit before tax 420
Income tax expense (150)
Profit for the period 270
Attributable to:
Equity holders of the parent 261
Non- controlling interest 9
270
You are also given the following information:

1. All the subsidiary are wholly owned
2. Depreciation charged to the consolidated income statement amounted to
N$210 000
3. There were no disposals of property, plant and equipment during the year
4. No dividend were paid by the parent company
Required
Prepare a Consolidated Statement of Cash flows for the year ended 31 December 2017 under the indirect method in accordance with IAS 7.

Answer 1

Consolidated Statement of Cash flows for the year ended 31 December 2017
indirect method in accordance with IAS 7
CASH FLOWS FROM OPERATING ACTIVITIES
Profit Before Taxation	420000
Less : Share of MI	-9000
Add: Depreciation	210000
	621000
Changes in assets and liabilities
Increase In Inventory	-250000
Increase In Receivables	-270000
Increase In Trade Payables	170000
Cash Flow From operation	271000
Income Taxes Paid	-100000
NET CASH GENERATED BY OPERATING ACTIVITIES	171000	171000
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditure on property, plant and equipment	-225000
Acquization of Contol in Subsidary	-230000
NET CASH FROM / (USED IN) INVESTING ACTIVITIES	-455000	-455000
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issue of Equity Share Capital	160000
Proceeds from Issue of Shares to Non Controlling InterestCapital	80000
NET CASH FLOWS FROM FINANCING ACTIVITIES	240000	240000
Net increase / (decrease) in cash and cash equivalents		-44000
Opening Balance of Cash and Cash Equivalents		50000
Add: Upon addition of Subsidiaries		10000
Closing Balance of Cash and Cash Equivalents		16000