Topic: Statement of Cash Flows (IAS 7)

Search 500 + past questions and counting.

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.

Question

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

Notes:

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.
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)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow, Financing Activities, Investing Activities, Operating Activities, Revaluation Surplus, Working Capital
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)

FR – May 2016 – L2 – Q6 – Inventory Accounting (IAS 2)

Calculate the working capital cycle and assess liquidity using specific ratios for Apapta Limited.

Question

The statement of financial position extract of Apapta Limited is given as follows:

	2015 (N’000)	2016 (N’000)
Inventories	3,950	3,250
Receivables	2,151	2,675
Investments (Marketable Securities)	430	375
Cash	565	–
	7,460	6,300
Payables amounts due within one year	(3,865)	(3,755)
	3,595	2,545

Payables are analysed as follows:

	2015 (N’000)	2016 (N’000)
Trade payables	2,600	2,215
Company Income Tax	695	820
Dividend payable	570	540
Bank overdraft	–	180
	3,865	3,755

Its profit or loss account extract is as follows:

Item	2015 (N’000)	2016 (N’000)
Sales	17,795	16,715
Cost of sales	(12,100)	(11,200)
Gross profit	5,695	5,515

Cost of sales is analysed as follows:

	2015 (N’000)	2016 (N’000)
Opening inventory	3,250	3,150
Add: Purchase	12,800	11,300
Less: Closing inventory	(3,950)	(3,250)
Cost of sales	12,100	11,200

In 2014 and 2015, credit sales were 83% of total sales.

Required:

a. Calculate the working capital cycle for 2015 and 2014. (9 Marks)

b. Compute the ratios listed below and comment on the company’s liquidity over the two years.

i. Cash ratio
ii. Current ratio
iii. Quick ratio (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 2

Topic: Inventory Accounting (IAS 2), Statement of Cash Flows (IAS 7)
Series: MAY 2016

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

Question

(a) Galadanci Plc, a telecommunications company, has the following financial statements for the years ending 31 December 2013 and 2014. Using the statements below, calculate specific ratios and analyze Galadanci Plc’s performance:

Statements of Profit or Loss and Other Comprehensive Income for the year ended

	2014 (N’billion)	2013 (N’billion)
Revenue	2,430	1,638
Cost of Sales	(1,701)	(983)
Gross Profit	729	655
Administrative Costs	(311)	(180)
Distribution Costs	(207)	(117)
Finance Costs	(36)	(6)
Profit before Taxation	175	352
Income Tax Expense	(54)	(102)
Profit for the Year	121	250

Statements of Financial Position as at 31 December

Additional Information for 2014

Galadanci Plc acquired 60% of Papanga Plc’s shares to diversify into agriculture.
The company increased its mobile subscriber base, raising the average revenue per user.
No dividends were received from Papanga Plc, and the share value remained constant.

Required:

Calculate the following ratios for the year ended 31 December 2014, analyze Galadanci Plc’s performance, and comment on qualitative factors impacting the company:
- Gross Profit Percentage
- Return on Capital Employed (where capital employed = Total Assets – Current Liabilities)
- Net Profit (PBIT) Percentage
- Asset Turnover
- Gearing Ratio
- Debt/Equity Ratio (16 Marks)
Prepare Galadanci Plc’s Cash Flows from Operating Activities using the indirect method according to IAS 7. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Turnover, Cash Flow Statement, Gearing Ratio, Gross Profit, Return on Capital Employed
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2015

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.

Question

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.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flows, Cash Management, Direct Method, Financing Activities, IAS 7, Investing Activities, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: NOV 2022

FR – May 2017 – L2 – SA – Q1 – Statement of Cash Flows

Prepare a cash flow statement for Bello Professional Nigeria Limited using the indirect method, discuss the direct method, and explain classification options for interest and dividends in cash flow statements.

Question

The following information relates to financial statements included in the annual report of Bello Professional Nigeria Limited.

Required

a. Prepare a statement of cash flow for Bello Professional Nigeria Limited for the year ended March 31, 2015, in accordance with IAS 7 using the indirect method. (18 Marks)

b. One of the directors at the annual general meeting suggested that the direct method of preparing cash flows is more useful. Comment on this view, providing your opinion. (7 Marks)

c. IAS 7 allows different classifications in cash flow statements. Explain the classification options for the following items:

i. Interest paid
ii. Dividends received
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow Classification, Cash Flow Presentation, Direct vs Indirect Method, Financial Reporting, IAS 7, Statement of Cash Flows
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2017

FR – May 2024 – L2 – SA – Q1 – Statement of Cash Flows (IAS 7)

Preparation of financial statements for Adama PLC, including profit or loss, changes in equity, and memo on EPS and ROCE.

Question

a. The following trial balance was extracted from the books of Adama Plc as at June 30, 2022:

Additional information:

The value of the freehold land and buildings includes a land element of N266,800,000, and the estimated remaining life of the buildings at July 1, 2021, was 25 years. Depreciation on buildings is charged 65% to cost of sales and 35% to administrative expenses.
The revenue includes N69,250,000 for an item of office equipment disposed of on November 30, 2021. The equipment had a carrying value of N46,060,000 at the date of sale. The equipment cost N75,000,000 when acquired three years ago.
Included in the cost of sales is N82,600,000 incurred in the manufacture of new office equipment, which was put to use by Adama PLC on February 1, 2022.
All office equipment is depreciated at 15% per annum using the reducing balance method, charged to cost of sales. Depreciation on all motor vehicles is at 20% per annum on a straight-line basis and charged to distribution costs. Depreciation is charged in full in the year of acquisition and no charge in the year of disposal.
Following the conclusion of winding-up proceedings for one of Adama PLC’s customers, it was resolved to write off the sum of N26,450,000 due from the customer and to make an allowance for doubtful receivables of 2½% on the continuing trade receivables.
The financial assets are equity instruments held at fair value through profit or loss, and they suffered an impairment loss of N12,700,000 at the year-end.
The 3% redeemable loan notes were issued on October 1, 2021, under terms that provided for a large premium on redemption in 2025. These terms were interpreted by the finance director to mean an effective interest rate of 6½% per annum.
The income tax expense for the year ended June 30, 2022, is estimated at N143,552,000, while the deferred tax payable for the same period is N12,520,000. There was an over-provision of N25,664,000 in respect of income tax for the previous trading year.
The suspense account balance represents the corresponding credit entry for shares issued at a premium of 15 kobo per share, arising from the issue of 400,000 ordinary shares made during the year.
The directors recommended a 20 kobo final dividend per ordinary share for the year and a transfer of N38,900,000 to the general reserve.

Required: Prepare for Adama PLC the following financial statements:

Statement of profit or loss and other comprehensive income for the year ended June 30, 2022. (10 Marks)
Statement of changes in equity for the same period. (4 Marks)
Statement of financial position as of June 30, 2022. (10 Marks)

b. Some new trainee accountants in your organization discussed Earnings Per Share (EPS) and Return on Capital Employed (ROCE) as the best ratios for analyzing an entity’s financial performance. The finance director has requested a memo explaining these ratios and highlighting their limitations.

Required:
Prepare a memo to the finance director explaining the EPS and ROCE ratios and their limitations. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comprehensive Income, Earnings Per Share, Financial Analysis, Financial Position, Profit or Loss Statement, Ratios, Return on Capital Employed
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2023

FR – May 2024 – L2 – SB – Q1 – Statement of Cash Flows

Prepare a statement of cash flows for Badary Plc using the direct method and discuss profitability, gearing, and investor's stake in Badary Plc.

Question

Additional Information:

(i) During the year ended March 31, 2021, plant and equipment with a carrying amount of N40,000,000 were sold for N55,000,000. The profit or loss on disposal was charged to distribution expenses.
(ii) Dividend of 2 kobo per share was paid in the year ended March 31, 2021, and there were also bonus issues.
(iii) Depreciation charged for the year was N10,000,000 on furniture and N30,000,000 on plant and equipment.
(iv) During the year, an investment that cost N12,500,000 some years ago was disposed of for N20,000,000. The profit or loss on disposal was charged to administrative expenses.
(v) Dividends received were from investments in shares and the immediate disposal of rights issues from the investment in a blue-chip company.

You are required to:
a. Prepare the statement of cash flows of Badary Plc for the year ended March 31, 2021, using the direct method in accordance with IAS 7. (20 Marks)
b. Discuss the profitability, gearing, and investor’s stake in Badary Plc and recommend strategies for improving or sustaining them. (10 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow, Financial Reporting, Gearing, IAS 7, Investor's Stake, Profitability analysis, Statement of Cash Flows
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2024

FR – Nov 2015 – L2 – Q6 – Statement of Cash Flows (IAS 7)

Prepare the statement of cash flows and comment on cash flow management for Global Plc.

Question

Global Plc is an entity quoted on the Nigerian Stock Exchange. You are provided with the following set of summarized published financial statements of the company for the year ended September 30, 2014:

Statement of profit or loss and other comprehensive income for the year ended September 30, 2014

Item	N’000
Revenue	500,000
Cost of sales	(300,000)
Gross profit	200,000
Administrative expenses	(29,000)
Finance cost	(1,000)
Profit before taxation	170,000
Income tax expense	(40,000)
Profit for the period	130,000

Statement of financial position as at September 30, 2014

Item	2014 (N’000)	2013 (N’000)
Non-current assets
Property, plant, and equipment	200,000	220,000
Goodwill	–	10,000
Current assets
Inventories	100,000	80,000
Trade receivables	75,000	60,000
Bank balances	20,000	5,000
Total assets	395,000	375,000

Equity and Liabilities	2014 (N’000)	2013 (N’000)
Equity
Ordinary shares @ N1.25 each	10,000	8,000
Retained earnings	250,000	197,000
Total equity	260,000	205,000

The following information is relevant:

During the financial year, the company paid a dividend of N87,000,000 to equity holders, and this had been accounted for during the year. The current market price of the company’s shares is N10 per share.
The company is planning to take a long-term loan of N400,000,000 from a consortium of banks. The company’s financial statements and loan applications have already been submitted to the bank.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow, Direct Method, Financing Activities, IAS 7, Indirect Method, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: NOV 2015

FR – May 2022 – L2 – SB – Q4 – Statement of Cash Flows

Prepare the statement of cash flows for Odibeze Nigeria PLC for the year ended April 30, 2021, using the indirect method, and explain the term cash and cash equivalents.

Question

The following financial statements were extracted from the 2021 annual report and accounts recently published by Odibeze Nigeria PLC.

Additional Information:

During the financial year, the company made a bonus issue of one share for every six shares held and a cash issue at N1.90kobo per share to provide funds for its anticipated expansion.
The company revalues its freehold properties annually, transferring any resulting surplus to the revaluation reserve.
A plant with a carrying amount of N20,000,000 was disposed of on September 30, 2020, for N11,200,000. The depreciation charge for the remaining plant and machinery was N24,000,000.
The investment income represents interest received on trade investments. Trade investments suffered an impairment loss of N10,000,000 by the year-end.
The company paid an interim dividend of N25,000,000 and proposed a final dividend of N45,000,000.

Required:
a. Prepare the statement of cash flows of Odibeze Nigeria PLC for the year ended April 30, 2021, in accordance with IAS 7, using the indirect method. (17 Marks)
b. In the context of IAS 7 – Statement of Cash Flows, explain the term “cash and cash equivalents” and list THREE examples. (3 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash and Cash Equivalents, Cash Flow, Indirect Method
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2022

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.

Question

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)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow Statement, Financing Activities, Indirect Method, Investing Activities, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: NOV 2016

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.

Question

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

Notes:

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.
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)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow, Financing Activities, Investing Activities, Operating Activities, Revaluation Surplus, Working Capital
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)

FR – May 2016 – L2 – Q6 – Inventory Accounting (IAS 2)

Calculate the working capital cycle and assess liquidity using specific ratios for Apapta Limited.

Question

The statement of financial position extract of Apapta Limited is given as follows:

	2015 (N’000)	2016 (N’000)
Inventories	3,950	3,250
Receivables	2,151	2,675
Investments (Marketable Securities)	430	375
Cash	565	–
	7,460	6,300
Payables amounts due within one year	(3,865)	(3,755)
	3,595	2,545

Payables are analysed as follows:

	2015 (N’000)	2016 (N’000)
Trade payables	2,600	2,215
Company Income Tax	695	820
Dividend payable	570	540
Bank overdraft	–	180
	3,865	3,755

Its profit or loss account extract is as follows:

Item	2015 (N’000)	2016 (N’000)
Sales	17,795	16,715
Cost of sales	(12,100)	(11,200)
Gross profit	5,695	5,515

Cost of sales is analysed as follows:

	2015 (N’000)	2016 (N’000)
Opening inventory	3,250	3,150
Add: Purchase	12,800	11,300
Less: Closing inventory	(3,950)	(3,250)
Cost of sales	12,100	11,200

In 2014 and 2015, credit sales were 83% of total sales.

Required:

a. Calculate the working capital cycle for 2015 and 2014. (9 Marks)

b. Compute the ratios listed below and comment on the company’s liquidity over the two years.

i. Cash ratio
ii. Current ratio
iii. Quick ratio (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Level: Level 2

Topic: Inventory Accounting (IAS 2), Statement of Cash Flows (IAS 7)
Series: MAY 2016

FR – May 2015 – L2 – SB – Q3 – Statement of Cash Flows (IAS 7)

Calculate and analyze financial ratios and prepare cash flows from operating activities for Galadanci Plc.

Question

Statements of Profit or Loss and Other Comprehensive Income for the year ended

	2014 (N’billion)	2013 (N’billion)
Revenue	2,430	1,638
Cost of Sales	(1,701)	(983)
Gross Profit	729	655
Administrative Costs	(311)	(180)
Distribution Costs	(207)	(117)
Finance Costs	(36)	(6)
Profit before Taxation	175	352
Income Tax Expense	(54)	(102)
Profit for the Year	121	250

Statements of Financial Position as at 31 December

Additional Information for 2014

Galadanci Plc acquired 60% of Papanga Plc’s shares to diversify into agriculture.
The company increased its mobile subscriber base, raising the average revenue per user.
No dividends were received from Papanga Plc, and the share value remained constant.

Required:

Calculate the following ratios for the year ended 31 December 2014, analyze Galadanci Plc’s performance, and comment on qualitative factors impacting the company:
- Gross Profit Percentage
- Return on Capital Employed (where capital employed = Total Assets – Current Liabilities)
- Net Profit (PBIT) Percentage
- Asset Turnover
- Gearing Ratio
- Debt/Equity Ratio (16 Marks)
Prepare Galadanci Plc’s Cash Flows from Operating Activities using the indirect method according to IAS 7. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Asset Turnover, Cash Flow Statement, Gearing Ratio, Gross Profit, Return on Capital Employed
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2015

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.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flows, Cash Management, Direct Method, Financing Activities, IAS 7, Investing Activities, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: NOV 2022

FR – May 2017 – L2 – SA – Q1 – Statement of Cash Flows

Prepare a cash flow statement for Bello Professional Nigeria Limited using the indirect method, discuss the direct method, and explain classification options for interest and dividends in cash flow statements.

Question

The following information relates to financial statements included in the annual report of Bello Professional Nigeria Limited.

Required

a. Prepare a statement of cash flow for Bello Professional Nigeria Limited for the year ended March 31, 2015, in accordance with IAS 7 using the indirect method. (18 Marks)

b. One of the directors at the annual general meeting suggested that the direct method of preparing cash flows is more useful. Comment on this view, providing your opinion. (7 Marks)

c. IAS 7 allows different classifications in cash flow statements. Explain the classification options for the following items:

i. Interest paid
ii. Dividends received
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow Classification, Cash Flow Presentation, Direct vs Indirect Method, Financial Reporting, IAS 7, Statement of Cash Flows
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2017

FR – May 2024 – L2 – SA – Q1 – Statement of Cash Flows (IAS 7)

Preparation of financial statements for Adama PLC, including profit or loss, changes in equity, and memo on EPS and ROCE.

Question

a. The following trial balance was extracted from the books of Adama Plc as at June 30, 2022:

Additional information:

The value of the freehold land and buildings includes a land element of N266,800,000, and the estimated remaining life of the buildings at July 1, 2021, was 25 years. Depreciation on buildings is charged 65% to cost of sales and 35% to administrative expenses.
The revenue includes N69,250,000 for an item of office equipment disposed of on November 30, 2021. The equipment had a carrying value of N46,060,000 at the date of sale. The equipment cost N75,000,000 when acquired three years ago.
Included in the cost of sales is N82,600,000 incurred in the manufacture of new office equipment, which was put to use by Adama PLC on February 1, 2022.
All office equipment is depreciated at 15% per annum using the reducing balance method, charged to cost of sales. Depreciation on all motor vehicles is at 20% per annum on a straight-line basis and charged to distribution costs. Depreciation is charged in full in the year of acquisition and no charge in the year of disposal.
Following the conclusion of winding-up proceedings for one of Adama PLC’s customers, it was resolved to write off the sum of N26,450,000 due from the customer and to make an allowance for doubtful receivables of 2½% on the continuing trade receivables.
The financial assets are equity instruments held at fair value through profit or loss, and they suffered an impairment loss of N12,700,000 at the year-end.
The 3% redeemable loan notes were issued on October 1, 2021, under terms that provided for a large premium on redemption in 2025. These terms were interpreted by the finance director to mean an effective interest rate of 6½% per annum.
The income tax expense for the year ended June 30, 2022, is estimated at N143,552,000, while the deferred tax payable for the same period is N12,520,000. There was an over-provision of N25,664,000 in respect of income tax for the previous trading year.
The suspense account balance represents the corresponding credit entry for shares issued at a premium of 15 kobo per share, arising from the issue of 400,000 ordinary shares made during the year.
The directors recommended a 20 kobo final dividend per ordinary share for the year and a transfer of N38,900,000 to the general reserve.

Required: Prepare for Adama PLC the following financial statements:

Statement of profit or loss and other comprehensive income for the year ended June 30, 2022. (10 Marks)
Statement of changes in equity for the same period. (4 Marks)
Statement of financial position as of June 30, 2022. (10 Marks)

Required:
Prepare a memo to the finance director explaining the EPS and ROCE ratios and their limitations. (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Comprehensive Income, Earnings Per Share, Financial Analysis, Financial Position, Profit or Loss Statement, Ratios, Return on Capital Employed
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2023

FR – May 2024 – L2 – SB – Q1 – Statement of Cash Flows

Prepare a statement of cash flows for Badary Plc using the direct method and discuss profitability, gearing, and investor's stake in Badary Plc.

Question

Additional Information:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow, Financial Reporting, Gearing, IAS 7, Investor's Stake, Profitability analysis, Statement of Cash Flows
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2024

FR – Nov 2015 – L2 – Q6 – Statement of Cash Flows (IAS 7)

Prepare the statement of cash flows and comment on cash flow management for Global Plc.

Question

Statement of profit or loss and other comprehensive income for the year ended September 30, 2014

Item	N’000
Revenue	500,000
Cost of sales	(300,000)
Gross profit	200,000
Administrative expenses	(29,000)
Finance cost	(1,000)
Profit before taxation	170,000
Income tax expense	(40,000)
Profit for the period	130,000

Statement of financial position as at September 30, 2014

Item	2014 (N’000)	2013 (N’000)
Non-current assets
Property, plant, and equipment	200,000	220,000
Goodwill	–	10,000
Current assets
Inventories	100,000	80,000
Trade receivables	75,000	60,000
Bank balances	20,000	5,000
Total assets	395,000	375,000

Equity and Liabilities	2014 (N’000)	2013 (N’000)
Equity
Ordinary shares @ N1.25 each	10,000	8,000
Retained earnings	250,000	197,000
Total equity	260,000	205,000

The following information is relevant:

During the financial year, the company paid a dividend of N87,000,000 to equity holders, and this had been accounted for during the year. The current market price of the company’s shares is N10 per share.
The company is planning to take a long-term loan of N400,000,000 from a consortium of banks. The company’s financial statements and loan applications have already been submitted to the bank.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow, Direct Method, Financing Activities, IAS 7, Indirect Method, Operating Activities
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: NOV 2015

FR – May 2022 – L2 – SB – Q4 – Statement of Cash Flows

Prepare the statement of cash flows for Odibeze Nigeria PLC for the year ended April 30, 2021, using the indirect method, and explain the term cash and cash equivalents.

Question

The following financial statements were extracted from the 2021 annual report and accounts recently published by Odibeze Nigeria PLC.

Additional Information:

During the financial year, the company made a bonus issue of one share for every six shares held and a cash issue at N1.90kobo per share to provide funds for its anticipated expansion.
The company revalues its freehold properties annually, transferring any resulting surplus to the revaluation reserve.
A plant with a carrying amount of N20,000,000 was disposed of on September 30, 2020, for N11,200,000. The depreciation charge for the remaining plant and machinery was N24,000,000.
The investment income represents interest received on trade investments. Trade investments suffered an impairment loss of N10,000,000 by the year-end.
The company paid an interim dividend of N25,000,000 and proposed a final dividend of N45,000,000.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash and Cash Equivalents, Cash Flow, Indirect Method
Level: Level 2

Topic: Statement of Cash Flows (IAS 7)
Series: MAY 2022

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.

Question

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.

(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)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cash Flow Statement, Financing Activities, Indirect Method, Investing Activities, Operating Activities
Level: Level 2