Information relevant to questions 1–5.

Scenario

On 1 April 20X7 Root Co acquired 116 million of Branch Co's 145 million ordinary shares for an immediate cash payment of $210 million and issued at par one 10% $100 loan note for every 200 shares acquired.

At the date of acquisition Branch Co owned a recently built property that was carried at its depreciated construction cost of $62 million. The fair value of this property at the date of acquisition was $82 million and it had an estimated remaining useful life of 20 years.

Branch Co also had an internally developed brand which was valued at the acquisition date at $25 million with a remaining life of 10 years.

The inventory of Branch Co at 31 March 20X9 includes goods supplied by Root Co for a sale price of $56 million.
Root adds a mark-up of 40% on cost to all sales.

REQUIREMENT

What is the amount of the unrealised profit arising from intragroup trading?

Information relevant to questions 1–5.

Scenario

On 1 April 20X7 Root Co acquired 116 million of Branch Co's 145 million ordinary shares for an immediate cash payment of $210 million and issued at par one 10% $100 loan note for every 200 shares acquired.

At the date of acquisition Branch Co owned a recently built property that was carried at its depreciated construction cost of $62 million. The fair value of this property at the date of acquisition was $82 million and it had an estimated remaining useful life of 20 years.

Branch Co also had an internally developed brand which was valued at the acquisition date at $25 million with a remaining life of 10 years.

The inventory of Branch Co at 31 March 20X9 includes goods supplied by Root Co for a sale price of $56 million.
Root adds a mark-up of 40% on cost to all sales.

REQUIREMENT

What will be the amount of the adjustment to group retained earnings at 31 March 20X9 in respect of the movement on the fair value adjustments?

Information relevant to questions 1–5.

Scenario

On 1 April 20X7 Root Co acquired 116 million of Branch Co's 145 million ordinary shares for an immediate cash payment of $210 million and issued at par one 10% $100 loan note for every 200 shares acquired.

At the date of acquisition Branch Co owned a recently built property that was carried at its depreciated construction cost of $62 million. The fair value of this property at the date of acquisition was $82 million and it had an estimated remaining useful life of 20 years.

Branch Co also had an internally developed brand which was valued at the acquisition date at $25 million with a remaining life of 10 years.

The inventory of Branch Co at 31 March 20X9 includes goods supplied by Root Co for a sale price of $56 million.
Root adds a mark-up of 40% on cost to all sales.

REQUIREMENT

What is the total amount of the consideration transferred by Root Co to acquire the investment in Branch Co?

Information relevant to questions 1–5.

Scenario

On 1 April 20X7 Root Co acquired 116 million of Branch Co's 145 million ordinary shares for an immediate cash payment of $210 million and issued at par one 10% $100 loan note for every 200 shares acquired.

At the date of acquisition Branch Co owned a recently built property that was carried at its depreciated construction cost of $62 million. The fair value of this property at the date of acquisition was $82 million and it had an estimated remaining useful life of 20 years.

Branch Co also had an internally developed brand which was valued at the acquisition date at $25 million with a remaining life of 10 years.

The inventory of Branch Co at 31 March 20X9 includes goods supplied by Root Co for a sale price of $56 million.
Root adds a mark-up of 40% on cost to all sales.

REQUIREMENT

What is the correct account entry for unrealised profit?

Information relevant to questions 1–5.

Scenario

On 1 April 20X7 Root Co acquired 116 million of Branch Co's 145 million ordinary shares for an immediate cash payment of $210 million and issued at par one 10% $100 loan note for every 200 shares acquired.

At the date of acquisition Branch Co owned a recently built property that was carried at its depreciated construction cost of $62 million. The fair value of this property at the date of acquisition was $82 million and it had an estimated remaining useful life of 20 years.

Branch Co also had an internally developed brand which was valued at the acquisition date at $25 million with a remaining life of 10 years.

The inventory of Branch Co at 31 March 20X9 includes goods supplied by Root Co for a sale price of $56 million.
Root adds a mark-up of 40% on cost to all sales.

REQUIREMENT

Branch Co has recently lost some large contracts and the directors of Root Co are wondering if Branch Co can be excluded from consolidation next year.

Which of the following situations would allow a subsidiary to be excluded from consolidation?

Information relevant to questions 1–5.

Scenario

On 1 November 20X4 Port Co purchased 75% of the equity of Alfred Co for $650,000. The consideration was 35,000 $1 equity shares in Port Co with a fair value of $650,000.

Noted below are extracts from the draft statements of profit or loss for Port Co and its subsidiary Alfred Co for the year ending 31 December 20X4 along with the draft statements of financial position as at 31 December 20X4.

The profits of Alfred Co have been earned evenly throughout the year.

DRAFT STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDING 31 DECEMBER 20X4 (extract)

DRAFT STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4 (extracts)

Port Co has not accounted for the issue of its own shares or for the acquisition of the investment in Alfred Co.

REQUIREMENT

What are the net assets of Alfred Co at acquisition?  $_______

Note. You are not required to put $ sign nor any coma. (e.g. 1000)

Information relevant to questions 1–5.

Scenario

On 1 November 20X4 Port Co purchased 75% of the equity of Alfred Co for $650,000. The consideration was 35,000 $1 equity shares in Port Co with a fair value of $650,000.

Noted below are extracts from the draft statements of profit or loss for Port Co and its subsidiary Alfred Co for the year ending 31 December 20X4 along with the draft statements of financial position as at 31 December 20X4.

The profits of Alfred Co have been earned evenly throughout the year.

DRAFT STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDING 31 DECEMBER 20X4 (extract)

DRAFT STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4 (extracts)

Port Co has not accounted for the issue of its own shares or for the acquisition of the investment in Alfred Co.

REQUIREMENT

What balances should be shown on the share capital and share premium accounts at 31 December 20X4?

Information relevant to questions 1–5.

Scenario

On 1 November 20X4 Port Co purchased 75% of the equity of Alfred Co for $650,000. The consideration was 35,000 $1 equity shares in Port Co with a fair value of $650,000.

Noted below are extracts from the draft statements of profit or loss for Port Co and its subsidiary Alfred Co for the year ending 31 December 20X4 along with the draft statements of financial position as at 31 December 20X4.

The profits of Alfred Co have been earned evenly throughout the year.

DRAFT STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDING 31 DECEMBER 20X4 (extract)

DRAFT STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4 (extracts)

Port Co has not accounted for the issue of its own shares or for the acquisition of the investment in Alfred Co.

REQUIREMENT

The accountant of Port Co is finalising the consolidated financial statements.

Which TWO of the following statements are true regarding consolidated financial statements?

Information relevant to questions 1–5.

Scenario

On 1 November 20X4 Port Co purchased 75% of the equity of Alfred Co for $650,000. The consideration was 35,000 $1 equity shares in Port Co with a fair value of $650,000.

Noted below are extracts from the draft statements of profit or loss for Port Co and its subsidiary Alfred Co for the year ending 31 December 20X4 along with the draft statements of financial position as at 31 December 20X4.

The profits of Alfred Co have been earned evenly throughout the year.

DRAFT STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDING 31 DECEMBER 20X4 (extract)

DRAFT STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4 (extracts)

Port Co has not accounted for the issue of its own shares or for the acquisition of the investment in Alfred Co.

REQUIREMENT

What is the amount of group gross profit for the year ended 31 December 20X4?

Information relevant to questions 1–5.

Scenario

On 1 November 20X4 Port Co purchased 75% of the equity of Alfred Co for $650,000. The consideration was 35,000 $1 equity shares in Port Co with a fair value of $650,000.

Noted below are extracts from the draft statements of profit or loss for Port Co and its subsidiary Alfred Co for the year ending 31 December 20X4 along with the draft statements of financial position as at 31 December 20X4.

The profits of Alfred Co have been earned evenly throughout the year.

DRAFT STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDING 31 DECEMBER 20X4 (extract)

DRAFT STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 20X4 (extracts)

Port Co has not accounted for the issue of its own shares or for the acquisition of the investment in Alfred Co.

REQUIREMENT

What is group retained earnings at 31 December 20X4?

The following scenario relates to questions 1–5.

Scenario

On 1 April 20X3, Polestar Co acquired 75% of the 12 million 50 cent equity shares of Southstar Co. Polestar Co made an immediate cash payment of $1.50 per share. The statements of profit or loss for the year ended 30 September 20X3 show revenue for Polestar Co and Southstar Co as $110million and $66million respectively.
Revenue accrued evenly over the year.

Additional information:

1. At the date of acquisition, the fair values of Southstar Co's assets were equal to their carrying amounts with the exception of right-of-use property held under a lease agreement. This had a fair value of $2 million above its carrying amount and a remaining lease term of ten years at that date. All depreciation is included in cost of sales.
2. Contingent consideration was estimated to be $1.8 million at 1 April 20X3, but by 30 September 20X3 due to continuing losses, its value was estimated at only $1.5 million. The contingent consideration has not been recorded by Polestar Co and the directors expect the acquisition to be a bargain purchase.
3. Polestar sold materials at their cost of $4 million to Southstar Co in June 20X3. Southstar Co processed all of these materials at an additional cost of $1.4 million and sold them back to Polestar Co in August 20X3 for $9 million. At 30 September 20X3 Polestar Co had $1.5 million of these goods still in inventory. There were no other intragroup sales.
4. Polestar Co's policy is to value the non-controlling interest at fair value at the date of acquisition. Southstar Co's share price of $1.20 per share at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. The retained earnings of Southstar at the acquisition date were $14.3 million.

REQUIREMENT

What is the amount of the adjustment to profit attributable to the non-controlling interest in respect of unrealised profit?

The following scenario relates to questions 1–5.

Scenario

On 1 April 20X3, Polestar Co acquired 75% of the 12 million 50 cent equity shares of Southstar Co. Polestar Co made an immediate cash payment of $1.50 per share. The statements of profit or loss for the year ended 30 September 20X3 show revenue for Polestar Co and Southstar Co as $110million and $66million respectively.
Revenue accrued evenly over the year.

Additional information:

1. At the date of acquisition, the fair values of Southstar Co's assets were equal to their carrying amounts with the exception of right-of-use property held under a lease agreement. This had a fair value of $2 million above its carrying amount and a remaining lease term of ten years at that date. All depreciation is included in cost of sales.
2. Contingent consideration was estimated to be $1.8 million at 1 April 20X3, but by 30 September 20X3 due to continuing losses, its value was estimated at only $1.5 million. The contingent consideration has not been recorded by Polestar Co and the directors expect the acquisition to be a bargain purchase.
3. Polestar sold materials at their cost of $4 million to Southstar Co in June 20X3. Southstar Co processed all of these materials at an additional cost of $1.4 million and sold them back to Polestar Co in August 20X3 for $9 million. At 30 September 20X3 Polestar Co had $1.5 million of these goods still in inventory. There were no other intragroup sales.
4. Polestar Co's policy is to value the non-controlling interest at fair value at the date of acquisition. Southstar Co's share price of $1.20 per share at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. The retained earnings of Southstar at the acquisition date were $14.3 million.

REQUIREMENT

Due to lower than expected profits of the acquired company, Southstar Co, the estimated value of the contingent consideration has fallen from $1.8million to $1.5million.

How this accounting entry should be accounted for in Polestar Co?

The following scenario relates to questions 1–5.

Scenario

On 1 April 20X3, Polestar Co acquired 75% of the 12 million 50 cent equity shares of Southstar Co. Polestar Co made an immediate cash payment of $1.50 per share. The statements of profit or loss for the year ended 30 September 20X3 show revenue for Polestar Co and Southstar Co as $110million and $66million respectively.
Revenue accrued evenly over the year.

Additional information:

1. At the date of acquisition, the fair values of Southstar Co's assets were equal to their carrying amounts with the exception of right-of-use property held under a lease agreement. This had a fair value of $2 million above its carrying amount and a remaining lease term of ten years at that date. All depreciation is included in cost of sales.
2. Contingent consideration was estimated to be $1.8 million at 1 April 20X3, but by 30 September 20X3 due to continuing losses, its value was estimated at only $1.5 million. The contingent consideration has not been recorded by Polestar Co and the directors expect the acquisition to be a bargain purchase.
3. Polestar sold materials at their cost of $4 million to Southstar Co in June 20X3. Southstar Co processed all of these materials at an additional cost of $1.4 million and sold them back to Polestar Co in August 20X3 for $9 million. At 30 September 20X3 Polestar Co had $1.5 million of these goods still in inventory. There were no other intragroup sales.
4. Polestar Co's policy is to value the non-controlling interest at fair value at the date of acquisition. Southstar Co's share price of $1.20 per share at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. The retained earnings of Southstar at the acquisition date were $14.3 million.

REQUIREMENT

Polestar Co measures the non-controlling interest in Southstar Co at fair value.

Which of the following applies when non-controlling interest is measured at fair value?

The following scenario relates to questions 1–5.

Scenario

On 1 April 20X3, Polestar Co acquired 75% of the 12 million 50 cent equity shares of Southstar Co. Polestar Co made an immediate cash payment of $1.50 per share. The statements of profit or loss for the year ended 30 September 20X3 show revenue for Polestar Co and Southstar Co as $110million and $66million respectively.
Revenue accrued evenly over the year.

Additional information:

1. At the date of acquisition, the fair values of Southstar Co's assets were equal to their carrying amounts with the exception of right-of-use property held under a lease agreement. This had a fair value of $2 million above its carrying amount and a remaining lease term of ten years at that date. All depreciation is included in cost of sales.
2. Contingent consideration was estimated to be $1.8 million at 1 April 20X3, but by 30 September 20X3 due to continuing losses, its value was estimated at only $1.5 million. The contingent consideration has not been recorded by Polestar Co and the directors expect the acquisition to be a bargain purchase.
3. Polestar sold materials at their cost of $4 million to Southstar Co in June 20X3. Southstar Co processed all of these materials at an additional cost of $1.4 million and sold them back to Polestar Co in August 20X3 for $9 million. At 30 September 20X3 Polestar Co had $1.5 million of these goods still in inventory. There were no other intragroup sales.
4. Polestar Co's policy is to value the non-controlling interest at fair value at the date of acquisition. Southstar Co's share price of $1.20 per share at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. The retained earnings of Southstar at the acquisition date were $14.3 million.

REQUIREMENT

What was the fair value of Southstar Co's net assets at the acquisition date? Submit your answer to one decimal place.

$________ million

The following scenario relates to questions 1–5.

Scenario

On 1 April 20X3, Polestar Co acquired 75% of the 12 million 50 cent equity shares of Southstar Co. Polestar Co made an immediate cash payment of $1.50 per share. The statements of profit or loss for the year ended 30 September 20X3 show revenue for Polestar Co and Southstar Co as $110million and $66million respectively.
Revenue accrued evenly over the year.

Additional information:

1. At the date of acquisition, the fair values of Southstar Co's assets were equal to their carrying amounts with the exception of right-of-use property held under a lease agreement. This had a fair value of $2 million above its carrying amount and a remaining lease term of ten years at that date. All depreciation is included in cost of sales.
2. Contingent consideration was estimated to be $1.8 million at 1 April 20X3, but by 30 September 20X3 due to continuing losses, its value was estimated at only $1.5 million. The contingent consideration has not been recorded by Polestar Co and the directors expect the acquisition to be a bargain purchase.
3. Polestar sold materials at their cost of $4 million to Southstar Co in June 20X3. Southstar Co processed all of these materials at an additional cost of $1.4 million and sold them back to Polestar Co in August 20X3 for $9 million. At 30 September 20X3 Polestar Co had $1.5 million of these goods still in inventory. There were no other intragroup sales.
4. Polestar Co's policy is to value the non-controlling interest at fair value at the date of acquisition. Southstar Co's share price of $1.20 per share at that date can be deemed to be representative of the fair value of the shares held by the non-controlling interest. The retained earnings of Southstar at the acquisition date were $14.3 million.

REQUIREMENT

What is consolidated revenue for the year ended 30 September 20X3?

Information relevant to questions 1–5.

Scenario

On 1 October 20X6 Plateau Co acquired the following non-current investments:

• Three million equity shares in Savannah Co by an exchange of one share in Plateau Co for every two shares in Savannah Co plus $1.25 per acquired Savannah Co share in cash. The market price of each Plateau Co share at the date of acquisition was $6 and the market price of each Savannah Co share at the date of acquisition was $3.25.
• 30% of the equity shares of Axle Co at a cost of $7.50 per share in

Only the cash consideration of the above investments has been recorded by Plateau Co.

Extracts from the summarised draft statements of financial position of the three companies at 30 September 20X7 are:

The following information is relevant:

1. At the date of acquisition Savannah Co had five years remaining of an agreement to supply goods to one of its major The agreement has been consistently renewed when it expires. The directors of Plateau Co estimate that the value of this customer based contract has a fair value of $1 million and an indefinite life and has not suffered any impairment.
2. During the year ended 30 September 20X7 Savannah Co sold goods to Plateau Co for $2.7 million. Savannah Co had marked up these goods by 50% on Plateau Co had a third of the goods still in its inventory at 30 September 20X7. There were no intragroup payables/receivables at 30 September 20X7.
3. It is the group policy to value non-controlling interest at acquisition at full (or fair) For this purpose the share price of Savannah Co at the acquisition date should be used.

REQUIREMENT

What amount will be shown in the consolidated statement of financial position at 30 September 20X7 in respect of the investment in Axle Co?

Information relevant to questions 1–5.

Scenario

On 1 October 20X6 Plateau Co acquired the following non-current investments:

• Three million equity shares in Savannah Co by an exchange of one share in Plateau Co for every two shares in Savannah Co plus $1.25 per acquired Savannah Co share in cash. The market price of each Plateau Co share at the date of acquisition was $6 and the market price of each Savannah Co share at the date of acquisition was $3.25.
• 30% of the equity shares of Axle Co at a cost of $7.50 per share in

Only the cash consideration of the above investments has been recorded by Plateau Co.

Extracts from the summarised draft statements of financial position of the three companies at 30 September 20X7 are:

The following information is relevant:

1. At the date of acquisition Savannah Co had five years remaining of an agreement to supply goods to one of its major The agreement has been consistently renewed when it expires. The directors of Plateau Co estimate that the value of this customer based contract has a fair value of $1 million and an indefinite life and has not suffered any impairment.
2. During the year ended 30 September 20X7 Savannah Co sold goods to Plateau Co for $2.7 million. Savannah Co had marked up these goods by 50% on Plateau Co had a third of the goods still in its inventory at 30 September 20X7. There were no intragroup payables/receivables at 30 September 20X7.
3. It is the group policy to value non-controlling interest at acquisition at full (or fair) For this purpose the share price of Savannah Co at the acquisition date should be used.

REQUIREMENT

What amount will be shown as non-controlling interest in the consolidated statement of financial position at 30 September 20X7?

Information relevant to questions 1–5.

Scenario

On 1 October 20X6 Plateau Co acquired the following non-current investments:

• Three million equity shares in Savannah Co by an exchange of one share in Plateau Co for every two shares in Savannah Co plus $1.25 per acquired Savannah Co share in cash. The market price of each Plateau Co share at the date of acquisition was $6 and the market price of each Savannah Co share at the date of acquisition was $3.25.
• 30% of the equity shares of Axle Co at a cost of $7.50 per share in

Only the cash consideration of the above investments has been recorded by Plateau Co.

Extracts from the summarised draft statements of financial position of the three companies at 30 September 20X7 are:

The following information is relevant:

1. At the date of acquisition Savannah Co had five years remaining of an agreement to supply goods to one of its major The agreement has been consistently renewed when it expires. The directors of Plateau Co estimate that the value of this customer based contract has a fair value of $1 million and an indefinite life and has not suffered any impairment.
2. During the year ended 30 September 20X7 Savannah Co sold goods to Plateau Co for $2.7 million. Savannah Co had marked up these goods by 50% on Plateau Co had a third of the goods still in its inventory at 30 September 20X7. There were no intragroup payables/receivables at 30 September 20X7.
3. It is the group policy to value non-controlling interest at acquisition at full (or fair) For this purpose the share price of Savannah Co at the acquisition date should be used.

REQUIREMENT

Plateau Co is negotiating a contract to supply goods to Axle Co in the coming year (ended 30 September 20X8) at 20% profit.

How will the unrealised profit on the sale of these goods be adjusted in the consolidated financial statements for the year ended 30 September 20X8?

Information relevant to questions 1–5.

Scenario

On 1 October 20X6 Plateau Co acquired the following non-current investments:

• Three million equity shares in Savannah Co by an exchange of one share in Plateau Co for every two shares in Savannah Co plus $1.25 per acquired Savannah Co share in cash. The market price of each Plateau Co share at the date of acquisition was $6 and the market price of each Savannah Co share at the date of acquisition was $3.25.
• 30% of the equity shares of Axle Co at a cost of $7.50 per share in

Only the cash consideration of the above investments has been recorded by Plateau Co.

Extracts from the summarised draft statements of financial position of the three companies at 30 September 20X7 are:

The following information is relevant:

1. At the date of acquisition Savannah Co had five years remaining of an agreement to supply goods to one of its major The agreement has been consistently renewed when it expires. The directors of Plateau Co estimate that the value of this customer based contract has a fair value of $1 million and an indefinite life and has not suffered any impairment.
2. During the year ended 30 September 20X7 Savannah Co sold goods to Plateau Co for $2.7 million. Savannah Co had marked up these goods by 50% on Plateau Co had a third of the goods still in its inventory at 30 September 20X7. There were no intragroup payables/receivables at 30 September 20X7.
3. It is the group policy to value non-controlling interest at acquisition at full (or fair) For this purpose the share price of Savannah Co at the acquisition date should be used.

REQUIREMENT

What is the total of the consideration paid by Plateau Co for Savannah Co?

Information relevant to questions 1–5.

Scenario

On 1 October 20X6 Plateau Co acquired the following non-current investments:

• Three million equity shares in Savannah Co by an exchange of one share in Plateau Co for every two shares in Savannah Co plus $1.25 per acquired Savannah Co share in cash. The market price of each Plateau Co share at the date of acquisition was $6 and the market price of each Savannah Co share at the date of acquisition was $3.25.
• 30% of the equity shares of Axle Co at a cost of $7.50 per share in

Only the cash consideration of the above investments has been recorded by Plateau Co.

Extracts from the summarised draft statements of financial position of the three companies at 30 September 20X7 are:

The following information is relevant:

1. At the date of acquisition Savannah Co had five years remaining of an agreement to supply goods to one of its major The agreement has been consistently renewed when it expires. The directors of Plateau Co estimate that the value of this customer based contract has a fair value of $1 million and an indefinite life and has not suffered any impairment.
2. During the year ended 30 September 20X7 Savannah Co sold goods to Plateau Co for $2.7 million. Savannah Co had marked up these goods by 50% on Plateau Co had a third of the goods still in its inventory at 30 September 20X7. There were no intragroup payables/receivables at 30 September 20X7.
3. It is the group policy to value non-controlling interest at acquisition at full (or fair) For this purpose the share price of Savannah Co at the acquisition date should be used.

REQUIREMENT

How should the customer contract in note (i) be accounted for? 

Information relevant to questions 1–5.

Scenario

Pinto Co is a publicly listed company. The following financial statements of Pinto Co are available:

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 31 MARCH 20X8 (extract)

STATEMENTS OF FINANCIAL POSITION (extracts) AS AT

The following supporting information is available:

1. An item of plant with a carrying amount of $240,000 was sold at a loss of $90,000 during the year. Depreciation of $280,000 was charged (to cost of sales) for property, plant and equipment in the year ended 31 March 20X8.Pinto Co uses the fair value model in IAS 40 Investment Property. There were no purchases or sales of investment property during the year.
2. A dividend of 3 cents per share was paid on 1 January Pinto Co has $1 million of 20 cent equity shares at 31 March 20X7 and 31 March 20X8.
3. $60,000 was included in Pinto's profit before tax for the year ended 31 March 20X8 in respect of income and gains on investment

You are preparing a statement of cash flows for Pinto Co for the year to 31 March 20X8.

REQUIREMENT

What is the amount of tax that Pinto Co either received or paid during the year?

Information relevant to questions 1–5.

Scenario

Pinto Co is a publicly listed company. The following financial statements of Pinto Co are available:

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 31 MARCH 20X8 (extract)

STATEMENTS OF FINANCIAL POSITION (extracts) AS AT

The following supporting information is available:

1. An item of plant with a carrying amount of $240,000 was sold at a loss of $90,000 during the year. Depreciation of $280,000 was charged (to cost of sales) for property, plant and equipment in the year ended 31 March 20X8.Pinto Co uses the fair value model in IAS 40 Investment Property. There were no purchases or sales of investment property during the year.
2. A dividend of 3 cents per share was paid on 1 January Pinto Co has $1 million of 20 cent equity shares at 31 March 20X7 and 31 March 20X8.
3. $60,000 was included in Pinto's profit before tax for the year ended 31 March 20X8 in respect of income and gains on investment

You are preparing a statement of cash flows for Pinto Co for the year to 31 March 20X8.

REQUIREMENT

What was the amount of the dividend paid on 1 January 20X8?

Information relevant to questions 1–5.

Scenario

Pinto Co is a publicly listed company. The following financial statements of Pinto Co are available:

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 31 MARCH 20X8 (extract)

STATEMENTS OF FINANCIAL POSITION (extracts) AS AT

The following supporting information is available:

1. An item of plant with a carrying amount of $240,000 was sold at a loss of $90,000 during the year. Depreciation of $280,000 was charged (to cost of sales) for property, plant and equipment in the year ended 31 March 20X8.Pinto Co uses the fair value model in IAS 40 Investment Property. There were no purchases or sales of investment property during the year.
2. A dividend of 3 cents per share was paid on 1 January Pinto Co has $1 million of 20 cent equity shares at 31 March 20X7 and 31 March 20X8.
3. $60,000 was included in Pinto's profit before tax for the year ended 31 March 20X8 in respect of income and gains on investment

You are preparing a statement of cash flows for Pinto Co for the year to 31 March 20X8.

REQUIREMENT

Pinto has spent $1,440,000 on purchase of plant.

What is the net cash used in investing activities?

Information relevant to questions 1–5.

Scenario

Pinto Co is a publicly listed company. The following financial statements of Pinto Co are available:

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 31 MARCH 20X8 (extract)

STATEMENTS OF FINANCIAL POSITION (extracts) AS AT

The following supporting information is available:

1. An item of plant with a carrying amount of $240,000 was sold at a loss of $90,000 during the year. Depreciation of $280,000 was charged (to cost of sales) for property, plant and equipment in the year ended 31 March 20X8.Pinto Co uses the fair value model in IAS 40 Investment Property. There were no purchases or sales of investment property during the year.
2. A dividend of 3 cents per share was paid on 1 January Pinto Co has $1 million of 20 cent equity shares at 31 March 20X7 and 31 March 20X8.
3. $60,000 was included in Pinto's profit before tax for the year ended 31 March 20X8 in respect of income and gains on investment

You are preparing a statement of cash flows for Pinto Co for the year to 31 March 20X8.

REQUIREMENT

Which of the following items will NOT be adjusted against Pinto Co's profit before tax in arriving at net cash from operating activities?

Information relevant to questions 1–5.

Scenario

Pinto Co is a publicly listed company. The following financial statements of Pinto Co are available:

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 31 MARCH 20X8 (extract)

STATEMENTS OF FINANCIAL POSITION (extracts) AS AT

The following supporting information is available:

1. An item of plant with a carrying amount of $240,000 was sold at a loss of $90,000 during the year. Depreciation of $280,000 was charged (to cost of sales) for property, plant and equipment in the year ended 31 March 20X8.Pinto Co uses the fair value model in IAS 40 Investment Property. There were no purchases or sales of investment property during the year.
2. A dividend of 3 cents per share was paid on 1 January Pinto Co has $1 million of 20 cent equity shares at 31 March 20X7 and 31 March 20X8.
3. $60,000 was included in Pinto's profit before tax for the year ended 31 March 20X8 in respect of income and gains on investment

You are preparing a statement of cash flows for Pinto Co for the year to 31 March 20X8.

REQUIREMENT

Under which TWO classification(s) can dividends paid be shown in the statement of cash flows?