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  • 20 Marks

CR – Nov 2018 – L3 – SB – Q4 – Statement of Cash Flows (IAS 7)

Preparation of Happy Plc’s statement of cash flows and analysis of revaluation and financing adjustments.

Happy is a publicly listed company. Its financial statements for the year ended July 31, 2017, including comparatives, are shown below:

Notes:

  1. On November 1, 2016, Happy acquired an additional plant under a finance lease with a fair value of ₦3 million. The property was also revalued upward by ₦4 million, with ₦1.3 million of the revaluation reserve transferred to deferred tax. No disposals occurred during the period.
  2. Depreciation on property, plant, and equipment amounted to ₦1.8 million, and amortization of deferred development expenditure was ₦0.4 million.

Required:

Prepare the statement of cash flows of Happy Plc for the year ended July 31, 2017, in accordance with IAS 7, using the indirect method. (20 Marks)

 

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  • 9 Marks

FR – Nov 2022 – L2 – Q2 – Statement of Cash Flows

Prepare a statement of cash flows using the direct method for Obudu Nigeria Limited based on the given financial statements.

Financial statements and extract from the cashbook of Obudu Nigeria Limited for the year ended December 31, 2020 are summarised below:
Obudu Nigeria Limited Statement of profit or Loss for the year ended December 31, 2020

Obudu Nigeria Limited Statement of financial position as at December 31



Other Information
(i) The 8% loan notes have been partly redeemed. It is expected that the full redemption will be made in five years time.
(ii) A cash payment for insurance of N1million was omitted in the cash book and other records.
(iii) The investments are not easily realisable.
Required:
a. Prepare the statement of cash flows for the year ended December 31, 2020 using the direct method in accordance with IAS 7. (9 Marks)
b. Prepare a statement of reconciliation of the operating profit to cash flow from operations. (5 Marks)
c. Discuss the benefits of statement of cash flows information to users of financial statements.

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  • 20 Marks

FR – NOV 2016 – L2 – Q4 – Statement of Cash Flows (IAS 7)

Preparation of statement of cash flows using indirect method and explanation of benefits of published cash flow statements to users.

The summarised Financial Statements for the year ended March 31, 2016 of Perfect World Plc are as follows:

STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED MARCH 31, 2016

N’m
Revenue 19,350
Cost of Sales (9,000)
Gross Profit 10,350
Operating Expenses (4,500)
Finance Costs (1,125)
Profit Before Tax 4,725
Income Tax Expense (2,025)
Profit for the year 2,700

STATEMENT OF FINANCIAL POSITION AS AT MARCH 31

2016 2015
N’m N’m
Non-Current Assets:
Property, Plant & Equipment 18,900 16,650
Current Assets
Inventories 6,750 7,200
Trade Receivables 9,900 8,100
16,650 15,300
Total Assets 35,550 31,950
Equity
Share Capital 5,400 5,400
Retained Earnings 9,900 8,550
15,300 13,950
Non-Current Liabilities
Deferred Tax 4,815 3,825
Financial Lease Liabilities 5,850 5,400
10,665 9,225
Current Liabilities
Trade Payables 5,625 4,905
Current Tax 1,013 923
Finance Lease Obligation 2,250 2,025
Bank Overdraft 697 922
9,585 8,775
Total Equity & Liabilities 35,550 31,950

Additional Information include:

(i) Dividend paid during the year amounted to N1,350million.

(ii) Perfect World Plc finances a number (but not all) of its property plant and equipment purchased using finance lease. During the period, property, plant and equipment which would have cost N2,700million to purchase outright was acquired under finance lease.

(iii) There was no accrual of interest at the beginning or at the end of the year.

(iv) Depreciation charged for the year totalled N4,365million. There were no disposals of property, plant and equipment during the year.

Required:

a. Prepare the statement of cashflows of Perfect World Plc for the year ended March 31, 2016 using indirect method. (14 Marks)

b. Draft a Memo to the Director of Perfect World Plc summarising the major benefits that users receive from a published statement of cashflows. (6 Marks)

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  • 20 Marks

FR – Dec 2022 – L2 – Q3 – IAS 7 Statement of Cash Flows

Prepare Dompa Ltd.'s statement of cash flows for the year ended 31 December 2021, using the indirect method based on the IAS 7 framework.

Dompa Ltd prepares its financial statements in accordance with IFRSs. Below are the statement of profit or loss for the year ended 31 December 2021 and the statement of financial position as at that date, and the comparative statement of financial position as at 31 December 2020.

Statement of Profit or Loss for the year ended 31 December 2021

Description GH¢’000
Revenue 1,656,000
Cost of sales (745,200)
Gross profit 910,800
Other income 15,000
Admin expenses (409,860)
Distribution costs (136,620)
Profit before interest & tax 379,320
Finance cost (3,232)
Profit before tax 376,088
Tax expense (9,462)
Profit for the year 366,626

Statement of Financial Position as at 31 December

Description 2021 (GH¢’000) 2020 (GH¢’000)
Non-current assets:
Property, Plant & Equipment 33,210 23,260
Investment Property 28,500 28,000
Intangible Assets 124 155
Total Non-Current Assets 61,834 51,415
Current assets:
Inventory 15,700 5,680
Trade Receivables 82,800 10,765
Cash 16,712 152
Bank 304,437 5,950
Total Current Assets 419,649 22,547
Total Assets 481,483 73,962
Equity & Liabilities:
Equity:
Share capital 30,000 25,000
Retained earnings 373,526 11,300
Revaluation surplus 862 1,262
Total Equity 404,388 37,562
Non-current liabilities:
15% bond redeemable in 2024 20,432 20,200
Deferred tax 3,762 2,300
Current liabilities:
Trade & other payables 46,401 7,600
Current tax 6,500 6,300
Total Equity & Liabilities 481,483 73,962

Additional Information:

i) Depreciation expense on tangible non-current assets recognised for the year is GH¢8,804,000.
ii) An impairment review has been undertaken on one of the machines of the company that has a carrying value of GH¢1,500,000, but an estimated recoverable amount at the impairment review date was GH¢745,000.
iii) One of the company’s vehicles was involved in an accident in the year and was written off with a carrying value of GH¢562,000.
iv) The company sold a machine for GH¢850,000 with a carrying value of GH¢689,000.
v) The company also issued a 15% bond in January 2020 at a par value of GH¢20,000 with a tenure of 5 years.
vi) The company realized GH¢400,000 in revaluation surplus through excess depreciation charges.

Required:
Using IAS 7: Statement of Cash Flows, prepare the statement of cash flow for Dompa Ltd for the year ended 31 December 2021.

 

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  • 20 Marks

FR – May 2018 – L2 – Q3 – Statement of Cash Flows (IAS 7)

Prepare a statement of cash flows using the indirect method and reconcile cash equivalents with the statement of financial position.

The statement of financial position of Abagana Plc as at July 31, 2016, and 2017 is shown below

Statement of Financial Position as at July 31

Additional Information:

  1. Equipment costing N45,000 was sold in February 2017 for N15,000. The company depreciates equipment at 20% per annum on cost, with a full charge in the year of acquisition and none in the year of disposal.
  2. Non-current asset investments costing N38,000 were sold during the year for N31,500.
  3. Dividends received during the year amounted to N7,500. Dividends paid during the year totaled N150,000.
  4. The 14% loan notes were redeemed in January 2017, and 12% loan notes were issued in July 2017.
  5. The company issued N75,000 ordinary shares at a premium of 60 kobo per share in January 2017.
  6. The net cash flow from operating activities using the indirect method is a deficit of N187,000.

Required: a. Prepare a statement of cash flows for the year ended July 31, 2017, in accordance with IAS 7, using the indirect method. (12 Marks)

b. Reconcile the total cash and cash equivalents shown by the statement of cash flows to the equivalent figures shown in the opening and closing statements of financial position. (5 Marks)

c. Comment briefly on the significance of the information provided by the statement of cash flows. (3 Marks)

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  • 1 Marks

FA – Nov 2015 – L1 – SA – Q10 – Elements of Financial Statements

This question calculates the net cash flow from investing activities for Alaye Enterprises.

What is the net cash flow from investing activities of Alaye Enterprises for the year ended December 31, 2014?
A. N440,000
B. N450,000
C. N(440,000)
D. N(450,000)
E. N460,000

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  • 25 Marks

FR – Nov 2018 – L2 – SA – Q1a – Statement of Cash Flows (IAS 7)

Prepare a statement of cash flows for Oshodi Nigeria Ltd using the indirect method and IAS 7.

The financial statements of OSHODI Nigeria Limited for the year ended May 13, 2017, are as follows:

Statement of Profit or Loss for the year ended May 31, 2017:

Item N’m
Revenue 3,820
Cost of sales (2,620)
Gross profit 1,200
Operating expenses (300)
Profit before interest and tax 900
Interest (30)
Profit before tax 870
Taxation (270)
Net profit 600

Statement of Financial Position as at May 31, 2017 (with comparative figures for 2016):

Assets 2017 N’m 2016 N’m
Non-Current Assets
Property, plant, and equipment 1,890 1,830
Intangible assets 650 300
Total non-current assets 2,540 2,130
Current Assets
Inventory 1,420 940
Accounts receivable 990 680
Cash 70 Nil
Total current assets 2,480 1,620
Total Assets 5,020 3,750

Equity and Liabilities:

Equity 2017 N’m 2016 N’m
Ordinary shares of N1 each 750 500
Share premium 300 100
Revaluation reserve 190 Nil
Retained earnings 1,610 1,400
Total equity 2,850 2,000

OSHODI NIGERIA LIMITED
Statement of Changes in Equity for the year ended May 31 2017

Notes to the financial statements:
(1) Cost of sales includes depreciation of property, plant and equipment of N320 million and a
loss on the sale of plant of N50 million. It also includes a credit for the amortisation of
government grants. Operating expenses include a charge of N20 million for the amortisation
of goodwill

(2)

(3)

(4)

The following additional information is relevant:
(i) Intangible assets:
The company successfully completed the development of a new product during the current
year, capitalising a further N500 million before amortisation charges for the period.

(ii) Property, plant and equipment/revaluation reserve:
The company revalued its buildings by N200 million on June 1 2016. The surplus was
credited to revaluation reserve.

  • New plant was acquired during the year at a cost of N250 million and a government grant
    of N50 million was received for the plant.
  • On June 1, 2016, a bonus issue of 1 new share for every 10 held was made from the share
    premium.
  • N10 million has been transferred from the revaluation reserve to realized profits as a year-end adjustment in respect of the additional depreciation created by the revaluation.
  • The remaining movement on property, plant and equipment was due to the disposal of
    obsolete plant.

(iii) Share issue:
In addition to the bonus issue referred to above, Oshodi Nigeria Limited made a further issue
of ordinary shares for cash.

Required:
Prepare the statement of cash flows for Oshodi Nigeria Limited for the year ended May 31, 2017, using the indirect method according to IAS 7.

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  • 20 Marks

FA – May 2023 – L1 – SB – Q2 – Financial Statements Preparation

Preparation of a statement of cash flows for Samu PLC using the indirect method.

Samu PLC is a listed company. The following financial statements of the company are available:

Statement of Profit or Loss for the Year Ended December 31, 2018:

N’m
Revenue 6,740
Cost of Sales (4,840)
Gross Profit 1,900
Income from Investment Property 60
Distribution Costs (120)
Administrative Expenses (350)
Finance Costs (50)
Profit Before Tax 1,440
Income Tax Expense (160)
Profit After Tax for the Year 1,280

Statement of Financial Position as at December 31:

2018 (N’m) 2017 (N’m)
Non-Current Assets:
Plant and Equipment 2,880 1,860
Investment Property 420 400
Current Assets:
Inventory 1,210 810
Trade Receivables 480 590
Bank 1,010 –
Total Assets 6,000 3,660
Equity:
Equity Share Capital of N0.50 each 2,000 600
Share Premium 750 50
Retained Earnings 1,440 1,310
Non-Current Liabilities:
8% Loan Notes 250 430
Current Liabilities:
Trade Payables 1,410 1,050
Bank Overdraft – 120
Income Tax Payable 150 100
Total Liabilities and Equity 6,000 3,660

Additional Information:

  1. An item of plant with a carrying amount of N240 million was sold at a loss of N90 million during the year. Depreciation of N280 million was charged on property, plant, and equipment in the year ended December 31, 2018. There were no sales of investment property during the year.
  2. Part of the 8% loan notes was redeemed during the year.
  3. There was an issue of shares for cash on June 1, 2018.
  4. Dividend was paid on September 1, 2018.

Required:

Prepare a statement of cash flows for Samu PLC for the year ended December 31, 2018, in accordance with IAS 7 Statement of Cash Flows, using the indirect method. (Total 20 Marks)

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  • 1 Marks

FA – May 2016 – L1 – SA – Q20 – Regulatory Environment of Accounting

Identifying which activity is not an investing activity under IAS 7.

Which of the following will NOT be regarded as an investing activity in relation to IAS 7 statement of cash flows?
A. Dividend received
B. Cash paid to acquire property, plant and equipment
C. Cash paid to acquire equities in other entities
D. Cash payment to supplier of goods and services
E. Proceeds from sale of property, plant and equipment

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  • 20 Marks

FA – May 2015 – L1 – Q6 – Financial Statements Preparation

Prepare a statement of cash flows using the direct method for the year ended 31 December 2014 with given financial data.

Financial data extracted from the books of Kandor Enterprises Limited for the year ended 31 December 2014 are shown below:

Details N’000
Revenue 6,990
Decrease in receivables 177
Cost of sales 5,128
Increase in inventories 1,483
Increase in payables 613
Selling and distribution expenses 300
Administrative expenses 343
Loss on disposal of non-current assets 6
Depreciation charges for the year 62
Ordinary shares issued for cash 400
Purchase of property, plant, and equipment 113
Income tax paid 198
Proceeds from disposal of non-current assets 3
Repayment of loan notes 10
Dividend paid 86
Interest paid on loan notes 191
Cash and cash equivalent at the beginning of the year (409)

Required:
Prepare the Statement of Cash Flows for the year ended 31 December 2014 using the direct method, showing:
a. Net cash flow from operating activities (5 Marks)
b. Net cash flow from investing activities (5 Marks)
c. Net cash flow from financing activities (5 Marks)
d. Cash and cash equivalents at the end of the year (5 Marks)

Show all workings.

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  • 20 Marks

CR – Nov 2018 – L3 – SB – Q4 – Statement of Cash Flows (IAS 7)

Preparation of Happy Plc’s statement of cash flows and analysis of revaluation and financing adjustments.

Happy is a publicly listed company. Its financial statements for the year ended July 31, 2017, including comparatives, are shown below:

Notes:

  1. On November 1, 2016, Happy acquired an additional plant under a finance lease with a fair value of ₦3 million. The property was also revalued upward by ₦4 million, with ₦1.3 million of the revaluation reserve transferred to deferred tax. No disposals occurred during the period.
  2. Depreciation on property, plant, and equipment amounted to ₦1.8 million, and amortization of deferred development expenditure was ₦0.4 million.

Required:

Prepare the statement of cash flows of Happy Plc for the year ended July 31, 2017, in accordance with IAS 7, using the indirect method. (20 Marks)

 

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  • 9 Marks

FR – Nov 2022 – L2 – Q2 – Statement of Cash Flows

Prepare a statement of cash flows using the direct method for Obudu Nigeria Limited based on the given financial statements.

Financial statements and extract from the cashbook of Obudu Nigeria Limited for the year ended December 31, 2020 are summarised below:
Obudu Nigeria Limited Statement of profit or Loss for the year ended December 31, 2020

Obudu Nigeria Limited Statement of financial position as at December 31



Other Information
(i) The 8% loan notes have been partly redeemed. It is expected that the full redemption will be made in five years time.
(ii) A cash payment for insurance of N1million was omitted in the cash book and other records.
(iii) The investments are not easily realisable.
Required:
a. Prepare the statement of cash flows for the year ended December 31, 2020 using the direct method in accordance with IAS 7. (9 Marks)
b. Prepare a statement of reconciliation of the operating profit to cash flow from operations. (5 Marks)
c. Discuss the benefits of statement of cash flows information to users of financial statements.

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  • 20 Marks

FR – NOV 2016 – L2 – Q4 – Statement of Cash Flows (IAS 7)

Preparation of statement of cash flows using indirect method and explanation of benefits of published cash flow statements to users.

The summarised Financial Statements for the year ended March 31, 2016 of Perfect World Plc are as follows:

STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED MARCH 31, 2016

N’m
Revenue 19,350
Cost of Sales (9,000)
Gross Profit 10,350
Operating Expenses (4,500)
Finance Costs (1,125)
Profit Before Tax 4,725
Income Tax Expense (2,025)
Profit for the year 2,700

STATEMENT OF FINANCIAL POSITION AS AT MARCH 31

2016 2015
N’m N’m
Non-Current Assets:
Property, Plant & Equipment 18,900 16,650
Current Assets
Inventories 6,750 7,200
Trade Receivables 9,900 8,100
16,650 15,300
Total Assets 35,550 31,950
Equity
Share Capital 5,400 5,400
Retained Earnings 9,900 8,550
15,300 13,950
Non-Current Liabilities
Deferred Tax 4,815 3,825
Financial Lease Liabilities 5,850 5,400
10,665 9,225
Current Liabilities
Trade Payables 5,625 4,905
Current Tax 1,013 923
Finance Lease Obligation 2,250 2,025
Bank Overdraft 697 922
9,585 8,775
Total Equity & Liabilities 35,550 31,950

Additional Information include:

(i) Dividend paid during the year amounted to N1,350million.

(ii) Perfect World Plc finances a number (but not all) of its property plant and equipment purchased using finance lease. During the period, property, plant and equipment which would have cost N2,700million to purchase outright was acquired under finance lease.

(iii) There was no accrual of interest at the beginning or at the end of the year.

(iv) Depreciation charged for the year totalled N4,365million. There were no disposals of property, plant and equipment during the year.

Required:

a. Prepare the statement of cashflows of Perfect World Plc for the year ended March 31, 2016 using indirect method. (14 Marks)

b. Draft a Memo to the Director of Perfect World Plc summarising the major benefits that users receive from a published statement of cashflows. (6 Marks)

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  • 20 Marks

FR – Dec 2022 – L2 – Q3 – IAS 7 Statement of Cash Flows

Prepare Dompa Ltd.'s statement of cash flows for the year ended 31 December 2021, using the indirect method based on the IAS 7 framework.

Dompa Ltd prepares its financial statements in accordance with IFRSs. Below are the statement of profit or loss for the year ended 31 December 2021 and the statement of financial position as at that date, and the comparative statement of financial position as at 31 December 2020.

Statement of Profit or Loss for the year ended 31 December 2021

Description GH¢’000
Revenue 1,656,000
Cost of sales (745,200)
Gross profit 910,800
Other income 15,000
Admin expenses (409,860)
Distribution costs (136,620)
Profit before interest & tax 379,320
Finance cost (3,232)
Profit before tax 376,088
Tax expense (9,462)
Profit for the year 366,626

Statement of Financial Position as at 31 December

Description 2021 (GH¢’000) 2020 (GH¢’000)
Non-current assets:
Property, Plant & Equipment 33,210 23,260
Investment Property 28,500 28,000
Intangible Assets 124 155
Total Non-Current Assets 61,834 51,415
Current assets:
Inventory 15,700 5,680
Trade Receivables 82,800 10,765
Cash 16,712 152
Bank 304,437 5,950
Total Current Assets 419,649 22,547
Total Assets 481,483 73,962
Equity & Liabilities:
Equity:
Share capital 30,000 25,000
Retained earnings 373,526 11,300
Revaluation surplus 862 1,262
Total Equity 404,388 37,562
Non-current liabilities:
15% bond redeemable in 2024 20,432 20,200
Deferred tax 3,762 2,300
Current liabilities:
Trade & other payables 46,401 7,600
Current tax 6,500 6,300
Total Equity & Liabilities 481,483 73,962

Additional Information:

i) Depreciation expense on tangible non-current assets recognised for the year is GH¢8,804,000.
ii) An impairment review has been undertaken on one of the machines of the company that has a carrying value of GH¢1,500,000, but an estimated recoverable amount at the impairment review date was GH¢745,000.
iii) One of the company’s vehicles was involved in an accident in the year and was written off with a carrying value of GH¢562,000.
iv) The company sold a machine for GH¢850,000 with a carrying value of GH¢689,000.
v) The company also issued a 15% bond in January 2020 at a par value of GH¢20,000 with a tenure of 5 years.
vi) The company realized GH¢400,000 in revaluation surplus through excess depreciation charges.

Required:
Using IAS 7: Statement of Cash Flows, prepare the statement of cash flow for Dompa Ltd for the year ended 31 December 2021.

 

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  • 20 Marks

FR – May 2018 – L2 – Q3 – Statement of Cash Flows (IAS 7)

Prepare a statement of cash flows using the indirect method and reconcile cash equivalents with the statement of financial position.

The statement of financial position of Abagana Plc as at July 31, 2016, and 2017 is shown below

Statement of Financial Position as at July 31

Additional Information:

  1. Equipment costing N45,000 was sold in February 2017 for N15,000. The company depreciates equipment at 20% per annum on cost, with a full charge in the year of acquisition and none in the year of disposal.
  2. Non-current asset investments costing N38,000 were sold during the year for N31,500.
  3. Dividends received during the year amounted to N7,500. Dividends paid during the year totaled N150,000.
  4. The 14% loan notes were redeemed in January 2017, and 12% loan notes were issued in July 2017.
  5. The company issued N75,000 ordinary shares at a premium of 60 kobo per share in January 2017.
  6. The net cash flow from operating activities using the indirect method is a deficit of N187,000.

Required: a. Prepare a statement of cash flows for the year ended July 31, 2017, in accordance with IAS 7, using the indirect method. (12 Marks)

b. Reconcile the total cash and cash equivalents shown by the statement of cash flows to the equivalent figures shown in the opening and closing statements of financial position. (5 Marks)

c. Comment briefly on the significance of the information provided by the statement of cash flows. (3 Marks)

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  • 1 Marks

FA – Nov 2015 – L1 – SA – Q10 – Elements of Financial Statements

This question calculates the net cash flow from investing activities for Alaye Enterprises.

What is the net cash flow from investing activities of Alaye Enterprises for the year ended December 31, 2014?
A. N440,000
B. N450,000
C. N(440,000)
D. N(450,000)
E. N460,000

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  • 25 Marks

FR – Nov 2018 – L2 – SA – Q1a – Statement of Cash Flows (IAS 7)

Prepare a statement of cash flows for Oshodi Nigeria Ltd using the indirect method and IAS 7.

The financial statements of OSHODI Nigeria Limited for the year ended May 13, 2017, are as follows:

Statement of Profit or Loss for the year ended May 31, 2017:

Item N’m
Revenue 3,820
Cost of sales (2,620)
Gross profit 1,200
Operating expenses (300)
Profit before interest and tax 900
Interest (30)
Profit before tax 870
Taxation (270)
Net profit 600

Statement of Financial Position as at May 31, 2017 (with comparative figures for 2016):

Assets 2017 N’m 2016 N’m
Non-Current Assets
Property, plant, and equipment 1,890 1,830
Intangible assets 650 300
Total non-current assets 2,540 2,130
Current Assets
Inventory 1,420 940
Accounts receivable 990 680
Cash 70 Nil
Total current assets 2,480 1,620
Total Assets 5,020 3,750

Equity and Liabilities:

Equity 2017 N’m 2016 N’m
Ordinary shares of N1 each 750 500
Share premium 300 100
Revaluation reserve 190 Nil
Retained earnings 1,610 1,400
Total equity 2,850 2,000

OSHODI NIGERIA LIMITED
Statement of Changes in Equity for the year ended May 31 2017

Notes to the financial statements:
(1) Cost of sales includes depreciation of property, plant and equipment of N320 million and a
loss on the sale of plant of N50 million. It also includes a credit for the amortisation of
government grants. Operating expenses include a charge of N20 million for the amortisation
of goodwill

(2)

(3)

(4)

The following additional information is relevant:
(i) Intangible assets:
The company successfully completed the development of a new product during the current
year, capitalising a further N500 million before amortisation charges for the period.

(ii) Property, plant and equipment/revaluation reserve:
The company revalued its buildings by N200 million on June 1 2016. The surplus was
credited to revaluation reserve.

  • New plant was acquired during the year at a cost of N250 million and a government grant
    of N50 million was received for the plant.
  • On June 1, 2016, a bonus issue of 1 new share for every 10 held was made from the share
    premium.
  • N10 million has been transferred from the revaluation reserve to realized profits as a year-end adjustment in respect of the additional depreciation created by the revaluation.
  • The remaining movement on property, plant and equipment was due to the disposal of
    obsolete plant.

(iii) Share issue:
In addition to the bonus issue referred to above, Oshodi Nigeria Limited made a further issue
of ordinary shares for cash.

Required:
Prepare the statement of cash flows for Oshodi Nigeria Limited for the year ended May 31, 2017, using the indirect method according to IAS 7.

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  • 20 Marks

FA – May 2023 – L1 – SB – Q2 – Financial Statements Preparation

Preparation of a statement of cash flows for Samu PLC using the indirect method.

Samu PLC is a listed company. The following financial statements of the company are available:

Statement of Profit or Loss for the Year Ended December 31, 2018:

N’m
Revenue 6,740
Cost of Sales (4,840)
Gross Profit 1,900
Income from Investment Property 60
Distribution Costs (120)
Administrative Expenses (350)
Finance Costs (50)
Profit Before Tax 1,440
Income Tax Expense (160)
Profit After Tax for the Year 1,280

Statement of Financial Position as at December 31:

2018 (N’m) 2017 (N’m)
Non-Current Assets:
Plant and Equipment 2,880 1,860
Investment Property 420 400
Current Assets:
Inventory 1,210 810
Trade Receivables 480 590
Bank 1,010 –
Total Assets 6,000 3,660
Equity:
Equity Share Capital of N0.50 each 2,000 600
Share Premium 750 50
Retained Earnings 1,440 1,310
Non-Current Liabilities:
8% Loan Notes 250 430
Current Liabilities:
Trade Payables 1,410 1,050
Bank Overdraft – 120
Income Tax Payable 150 100
Total Liabilities and Equity 6,000 3,660

Additional Information:

  1. An item of plant with a carrying amount of N240 million was sold at a loss of N90 million during the year. Depreciation of N280 million was charged on property, plant, and equipment in the year ended December 31, 2018. There were no sales of investment property during the year.
  2. Part of the 8% loan notes was redeemed during the year.
  3. There was an issue of shares for cash on June 1, 2018.
  4. Dividend was paid on September 1, 2018.

Required:

Prepare a statement of cash flows for Samu PLC for the year ended December 31, 2018, in accordance with IAS 7 Statement of Cash Flows, using the indirect method. (Total 20 Marks)

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  • 1 Marks

FA – May 2016 – L1 – SA – Q20 – Regulatory Environment of Accounting

Identifying which activity is not an investing activity under IAS 7.

Which of the following will NOT be regarded as an investing activity in relation to IAS 7 statement of cash flows?
A. Dividend received
B. Cash paid to acquire property, plant and equipment
C. Cash paid to acquire equities in other entities
D. Cash payment to supplier of goods and services
E. Proceeds from sale of property, plant and equipment

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  • 20 Marks

FA – May 2015 – L1 – Q6 – Financial Statements Preparation

Prepare a statement of cash flows using the direct method for the year ended 31 December 2014 with given financial data.

Financial data extracted from the books of Kandor Enterprises Limited for the year ended 31 December 2014 are shown below:

Details N’000
Revenue 6,990
Decrease in receivables 177
Cost of sales 5,128
Increase in inventories 1,483
Increase in payables 613
Selling and distribution expenses 300
Administrative expenses 343
Loss on disposal of non-current assets 6
Depreciation charges for the year 62
Ordinary shares issued for cash 400
Purchase of property, plant, and equipment 113
Income tax paid 198
Proceeds from disposal of non-current assets 3
Repayment of loan notes 10
Dividend paid 86
Interest paid on loan notes 191
Cash and cash equivalent at the beginning of the year (409)

Required:
Prepare the Statement of Cash Flows for the year ended 31 December 2014 using the direct method, showing:
a. Net cash flow from operating activities (5 Marks)
b. Net cash flow from investing activities (5 Marks)
c. Net cash flow from financing activities (5 Marks)
d. Cash and cash equivalents at the end of the year (5 Marks)

Show all workings.

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