2019 ZMW 000 2019 USD 000 2018 ZMW ODOS 2018 USD'OODS Note 13 13,628 ASSETS Non-current assets Goodwill Property, plant and equipment Investment in associate Deferred tax asset 12,636 215,290 14 15(e) 10e) 166,801 2,841,824 12,376 56,525 3,077.526 166,801 2,902,221 15,412 47,854 3.132.288 237,110 1.259 938 4,282 233,146 3,910 255,907 16 14,843 170,417 941.159 17 Current assets Biological assets Inventories Trade and other receivables Assets held for disposal Amounts due from related companies Income tax recoverable 12,910 71,300 7,426 181,674 639,811 156,314 52,272 12,771 18 98,025 34 135,357 10,254 3,148 19 41.554 50,272 4,107 100) 210 317 2,767 1389 279 105 248 338 396 3.885 1,031.955 4,164, 244 84,310 340,217 4.456 SOS Total assets EQUITY AND LIABILITIES Capital and reserves Share capital Preference share capital Share premium Other reserves 449 449 21 21 22 100 3,006 1.000 1,125,012 2,116,691 3.245,709 (4,881) 3.240.628 185,095 60,243 245,887 (370) 245,517 3,006 1,000 1,125,012 1,986,756 3,115,774 (8,660) 3,107,114 100 185,095 68,916 254,560 (708) 253,852 Non-controlling interest Consolidated Statement of Financial Position (continued) For the year ended 30 September 2019 2019 2019 USD'000 2018 ZMW ODOS 2018 USD'ODOS Note ZMW 000 23 228,099 17,280 25,189 Non-current liabilities Interest bearing liabilities Obligations under finance leases Deferred liability Deferred tax liability 24 19,297 1,462 308,312 20,163 22,611 6,909 1,647 1,847 1.240 25 10(e) 16,362 9,138 692 565 272.896 20.674 357,995 29,241 23 130,661 9,899 95,247 Current liabilities Interest bearing liabilities Collateral management agreement Obligations under finance leases Trade and other payables 7,782 8,759 23 212,381 16,089 107,213 24 21,487 18,248 1,491 26 259,585 1,628 19,665 4,009 297,390 24,294 Provisions 27 52,914 42,137 3,443 28 251 19 232 Amounts due to related companies Taxation payable Bank overdrafts 100) 1,377 104 2,925 23 20 274,425 20,790 135,743 11,09 953,081 72 203 699,135 57,11 4,466,305 338,394 4164 244 340,21 Total equity and liabilities The following information is also available a)Zamleather limited was acquired by Zambeef group of companies 2 years ago. One of its equipment has been reported in the above consolidated statement of financial position at cost of K50,000,000, although its fair value at the date of acquisition was K60,000,000. This equipment is depreciated using straight-line method and has a life span of 10 year with no residue value. Required i)Citing relevant financial reporting standards comment on the appropriateness of measurement of the assets of Zam leather by the group. (4 marks) ii) Using appropriate journal entries suggest any amendments that should be made to the consolidated statement of financial for both 2018 and 2019 above.(8 marks) ill) State the ledger accounts that will be affected by the above treatment stating whether the affected ledger accounts have been overstated or understated. (6 marks) b) On 1 June 2019, Master meats Nigeria sold products costing 1,080,000,000 Nigerian Naira (NGN) to Zambeef PLC (parent company) at a mark-up of 20%. Zambeef PLC made a part payment of 80,000,000 NGN on July 1 2019 and the balance on 31 March 2020. Zambeef PLC was still holding half of these goods in its inventory at the year. Exchange rates were as follows. (1ZMW =35NGN on 1 June 2019, 1ZMW=40NGN on July 1 2019, 1ZMW=29.1NGN on 30 September 2019, 1ZMW= 28NGN on December 2019 and 1ZMW = 27 NGN on 31 March 2019). This transaction has been omitted in the books of both Master meats Nigeria and Zambeef PLC. Required 1) Prepare the journal entries that would have been made by Master meats Nigeria and Zambeef PLC. On June 1, 2019 and on July 1 2019(8 marks) ii) State the ledger accounts in the above consolidated statement of financial position that will be affect once the above sales transaction is updated and explain by how much the said accounts will increase or decrease. (8 marks) Zambeef is the largest vertically integrated food retailing brand in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, mik, dairy products, eggs, stock feed and flour. The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 7,787 hectares of row crops under irrigation which are planted twice a year, and a further 8,694 hectares of rainfed/dryland crops available for planting each year. Zambeef's vision is to be one of the most accessible and affordable quality protein providers in the Southern Africa region, delivered through the Group's extensive retail and distribution network. It continues to pursue a vertically integrated business model which provides strong foundations for growth and below is the group structure Group Organogram & Structure Chart Zambeef Products PLC Operating Divisions within Zambeed Products PLC & Day Oporg Stock Food Zambert Retailing Ltd Zamleather Ltd Masterport Ltd Zampalm Ltd Zam Chick Ltd Tanhatch Lid Master Meats Nigeria Ltd Master Meats Ghana Pain Pation RO Abelion Processing Parts Logic Refers Tannery Finished Leather Division Shoe Division Pony Porto Meat Pro Plant Chicken Cicero HO Processing Breedom Hatchery Feed Feedlot Autor Preoning Plant Real 100% 100% 100% 10 00% 100% 30% 100% 2019 ZMW 000 2019 USD 000 2018 ZMW ODOS 2018 USD'OODS Note 13 13,628 ASSETS Non-current assets Goodwill Property, plant and equipment Investment in associate Deferred tax asset 12,636 215,290 14 15(e) 10e) 166,801 2,841,824 12,376 56,525 3,077.526 166,801 2,902,221 15,412 47,854 3.132.288 237,110 1.259 938 4,282 233,146 3,910 255,907 16 14,843 170,417 941.159 17 Current assets Biological assets Inventories Trade and other receivables Assets held for disposal Amounts due from related companies Income tax recoverable 12,910 71,300 7,426 181,674 639,811 156,314 52,272 12,771 18 98,025 34 135,357 10,254 3,148 19 41.554 50,272 4,107 100) 210 317 2,767 1389 279 105 248 338 396 3.885 1,031.955 4,164, 244 84,310 340,217 4.456 SOS Total assets EQUITY AND LIABILITIES Capital and reserves Share capital Preference share capital Share premium Other reserves 449 449 21 21 22 100 3,006 1.000 1,125,012 2,116,691 3.245,709 (4,881) 3.240.628 185,095 60,243 245,887 (370) 245,517 3,006 1,000 1,125,012 1,986,756 3,115,774 (8,660) 3,107,114 100 185,095 68,916 254,560 (708) 253,852 Non-controlling interest Consolidated Statement of Financial Position (continued) For the year ended 30 September 2019 2019 2019 USD'000 2018 ZMW ODOS 2018 USD'ODOS Note ZMW 000 23 228,099 17,280 25,189 Non-current liabilities Interest bearing liabilities Obligations under finance leases Deferred liability Deferred tax liability 24 19,297 1,462 308,312 20,163 22,611 6,909 1,647 1,847 1.240 25 10(e) 16,362 9,138 692 565 272.896 20.674 357,995 29,241 23 130,661 9,899 95,247 Current liabilities Interest bearing liabilities Collateral management agreement Obligations under finance leases Trade and other payables 7,782 8,759 23 212,381 16,089 107,213 24 21,487 18,248 1,491 26 259,585 1,628 19,665 4,009 297,390 24,294 Provisions 27 52,914 42,137 3,443 28 251 19 232 Amounts due to related companies Taxation payable Bank overdrafts 100) 1,377 104 2,925 23 20 274,425 20,790 135,743 11,09 953,081 72 203 699,135 57,11 4,466,305 338,394 4164 244 340,21 Total equity and liabilities The following information is also available a)Zamleather limited was acquired by Zambeef group of companies 2 years ago. One of its equipment has been reported in the above consolidated statement of financial position at cost of K50,000,000, although its fair value at the date of acquisition was K60,000,000. This equipment is depreciated using straight-line method and has a life span of 10 year with no residue value. Required i)Citing relevant financial reporting standards comment on the appropriateness of measurement of the assets of Zam leather by the group. (4 marks) ii) Using appropriate journal entries suggest any amendments that should be made to the consolidated statement of financial for both 2018 and 2019 above.(8 marks) ill) State the ledger accounts that will be affected by the above treatment stating whether the affected ledger accounts have been overstated or understated. (6 marks) b) On 1 June 2019, Master meats Nigeria sold products costing 1,080,000,000 Nigerian Naira (NGN) to Zambeef PLC (parent company) at a mark-up of 20%. Zambeef PLC made a part payment of 80,000,000 NGN on July 1 2019 and the balance on 31 March 2020. Zambeef PLC was still holding half of these goods in its inventory at the year. Exchange rates were as follows. (1ZMW =35NGN on 1 June 2019, 1ZMW=40NGN on July 1 2019, 1ZMW=29.1NGN on 30 September 2019, 1ZMW= 28NGN on December 2019 and 1ZMW = 27 NGN on 31 March 2019). This transaction has been omitted in the books of both Master meats Nigeria and Zambeef PLC. Required 1) Prepare the journal entries that would have been made by Master meats Nigeria and Zambeef PLC. On June 1, 2019 and on July 1 2019(8 marks) ii) State the ledger accounts in the above consolidated statement of financial position that will be affect once the above sales transaction is updated and explain by how much the said accounts will increase or decrease. (8 marks) Zambeef is the largest vertically integrated food retailing brand in Zambia. The Group is principally involved in the production, processing, distribution and retailing of beef, chicken, pork, mik, dairy products, eggs, stock feed and flour. The Group also has large row cropping operations (principally maize, soya beans and wheat), with approximately 7,787 hectares of row crops under irrigation which are planted twice a year, and a further 8,694 hectares of rainfed/dryland crops available for planting each year. Zambeef's vision is to be one of the most accessible and affordable quality protein providers in the Southern Africa region, delivered through the Group's extensive retail and distribution network. It continues to pursue a vertically integrated business model which provides strong foundations for growth and below is the group structure Group Organogram & Structure Chart Zambeef Products PLC Operating Divisions within Zambeed Products PLC & Day Oporg Stock Food Zambert Retailing Ltd Zamleather Ltd Masterport Ltd Zampalm Ltd Zam Chick Ltd Tanhatch Lid Master Meats Nigeria Ltd Master Meats Ghana Pain Pation RO Abelion Processing Parts Logic Refers Tannery Finished Leather Division Shoe Division Pony Porto Meat Pro Plant Chicken Cicero HO Processing Breedom Hatchery Feed Feedlot Autor Preoning Plant Real 100% 100% 100% 10 00% 100% 30% 100%