group cash flow statements

1 Answer Chapter 20 group cash flow Answer – Exercise - Operating Activities direct & indirect Indirect method Operating activities Profit before tax Investment income Finance cost Depreciation Impairment loss Current service cost Share based payments Negative goodwill Exchange gain – individual company stage Increase in inventory Decrease in receivables Increase in payables Cash generated 82,000 (12,000) 10,000 25,000 40,000 20,000 15,000 (6,000) (4,000) (5,000) 6,000 3,000 174,000 Direct method Cash received from customers Cash paid to suppliers Cash paid to staff Other operating payments Cash generated 800,000 (400,000) (100,000) (126,000) 174,000 Chapter 20 Group Cash Flow Statements Clendon as published by Kaplan A $ T Answer - Weller Group cash flow Weller Operating activities Profit before tax Add back finance costs Less income from associate Depreciation Less profit on disposal (854 – 305) (W1) Impairment loss on goodwill Current service costs Changes in working capital (W2) Increase inventory Increase receivables Increase payables Cash generated Pension contribution paid Interest paid (305 – pension unwinding 29) (W3) Taxation paid $000 4,866 305 (30) 907 (549) 179 560 $000 (1,397) (148) 673 5,366 (100) (276) (1,016) 3,974 Investing Activities Proceeds disposal NCA Acquisition of subsidiary Cash taken over new subsidiary (W4) Payment to buy NCA (W5) Dividends received from associate Financing Activities Dividends paid Dividends paid to NCI (W6) New loans 854 (1,268) 232 (3,161) 10 - (3,333) (445) (20) 108 - Thus increase in cash and cash equivalents Opening cash and cash equivalents (394 + 741 – 91) Closing cash and cash equivalents (1,013 + 1,543 – 1,228) (357) -284 1,044 -1,328 Chapter 20 Group Cash Flow Statements Clendon as published by Kaplan A T Workings (W1) Goodwill Opening balance Acquire subsidiary Exchange gain Impairment loss - balancing figure 85 585 (179) 500 - c/bal FV of P investment NCI as a proportion of NA (18% x 833) FV NA Goodwill on the acquisition 1,268 150 (833) -585 (W2) Working capital changes Opening balance Acq subsidiary Exchange difference Increase - balancing figures Closing balance Inventory 7,624 612 116 Receivables 4,420 500 286 Payables 2,989 407 209 1,397 9,749 - 148 5,354 - 673 4,278 (W3) Taxation paid Opening balance CL Opening balance NCL - deferred tax Tax charge Thus cash paid balancing figure Closing balances (3,722 + 555) Chapter 20 Group Cash Flow Statements Clendon as published by Kaplan A Liability 2,566 689 2,038 (1,016) 4,277 T (W4) Non-current assets o/bal Disposal Depreciation Acq subsidiary Exchange gain 8,900 (305) (907) 208 100 7,996 3,161 11,157 Cash paid - balancing figure c/bal (W5) Investment in associate o/bal Income from associate Cash received - balancing figure c/bal 280 30 310 (10) -300 (W6) Loans – new o/bal Acq subsidiary Cash received - balancing figure c/bal Chapter 20 Group Cash Flow Statements Clendon as published by Kaplan A 1,682 312 -1,994 108 2,102 - T ... cash and cash equivalents Opening cash and cash equivalents (394 + 741 – 91) Closing cash and cash equivalents (1,013 + 1,543 – 1,228) (357) -284 1,044 -1,328 Chapter 20 Group Cash. .. CL Opening balance NCL - deferred tax Tax charge Thus cash paid balancing figure Closing balances (3,722 + 555) Chapter 20 Group Cash Flow Statements Clendon as published by Kaplan A Liability... 310 (10) -300 (W6) Loans – new o/bal Acq subsidiary Cash received - balancing figure c/bal Chapter 20 Group Cash Flow Statements Clendon as published by Kaplan A 1,682 312 -1,994