Seaction A

1. C

2. B

3. A

4. D

5. Payments made to suppliers, Receipts from customers, Finance costs paid

6. D

7. $4,350

8. B

9. (i) Not capitalized

    (ii) Capitalized

    (iii) Not capitalized

    (iv) Capitalized

10. C

 

11. $9,600

12. A

13. C

 14. B

 15. False

 16. $92,100

17. B

 18. D

 19. D

 20. A

21. $3,004

22. B

 23. D

24. A. FALSE 

       B. FALSE

25. D

26. A

27. D

28. C

 29. It is the cheapest way for an entity to raise finance through the issuing of shares

No dilution in the value of existing shares

 30. C

31. C

32. C

33. B

34. $800

35. B

Seaction B

Question 1

36. Light Co

 

Statement of cash flows for Light for year ended 31 December 20X8

                                                                                                 $000

Cash flows from operating activities

Profit before tax                                                                     163

Adjustments for:

Finance charge                                                                         22

Investment income                                                                (72)

Depreciation                                                                             85

Loss on disposal of plant                                                          5

Decrease in inventory                                                               7

Increase in trade receivables                                               (16)

Decrease in trade payables                                                    (2)

                                                                                                 –––––

Cash generated from operations                                        192

Interest paid                                                                            (24)

Tax paid                                                                                    (62)

                                                                                                 –––––

Net cash from operating activities                                      106

 

Cash flows from investing activities

Proceeds of sale of equipment                                             60 

Purchase of property, plant and equipment                   (178)

Interest received                                                                      15

Dividends received                                                                  50

                                                                                                –––––

Net cash used in investing activities   53

 

Cash flows from financing activities

Proceeds of issue of shares                                                 106

Repayment of loans                                                            (100)

Dividends paid                                                                       (35)

                                                                                               –––––

Net cash used in financing activities                                 (29)

 

                                                                                                –––––

 

Net increase in cash and cash equivalents                   24

 

Cash and cash equivalents at beginning of period      18

                                                                                               –––––

Cash and cash equivalents at end period                      42

                                                                                                –––––

Question 2

Task 1

 

Select answer

Fair value of consideration paid

Plus: Fair value of non‐controlling interest at acquisition

Plus: Fair value of net assets at acquisition date

 

Fair value of consideration paid

Less: Fair value of non‐controlling interest at acquisition

Plus: Fair value of net assets at acquisition date

 

Fair value of consideration paid

Plus: Fair value of non‐controlling interest at acquisition

Less: Fair value of net assets at acquisition date

Correct

Task 2

Using the individual entity financial statements, calculate the following ratios for Sky and Cloud Co for the year ended 31 December 20X9. 

 

Sky Co

Cloud Co

Gross profit margin

53.3%

57.1%

Operating profit margin

32.7%

36.4%

Task 3

(a) (i) True

     (ii) True

Task 4

(a) $855,000

Task 5

(a) iii