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