Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can you please show workings not in excel forms. thank you SECTION B ANSWER ANY TWO (2) QUESTIONS QUESTION 2 [30 MARKS] Charmer is a

image text in transcribed

image text in transcribed

can you please show workings not in excel forms. thank you

SECTION B ANSWER ANY TWO (2) QUESTIONS QUESTION 2 [30 MARKS] Charmer is a public listed company Details of its financial statements for the year ended 30 September 2016, together with a comparative statement of financial position, are: Statement of financial postion as at 30-Sep-17 $ 000 30-Sep-16 $ 000 Non-Current assets Property, plant & equipment Software Investments Total non-current assets 2.560 270 300 3,130 1,880 200 250 2,330 Current assets Inventories Trade receivables Bank Total current assets 960 700 920 770 70 1,760 1,660 Total assets 4,790 4,090 Equity and liabilities Capital and reserves Equity shares of $ 1 each Share premium Revaluation reserve Retained earnings Total capital and reserves 1,000 200 120 2.000 3,320 600 170 50 1,930 2,750 Non-current liabilities 9% loan notes 600 50 Current liabilities Bank overdraft Trade payables Tax payables Interest payables Total current liabilities 50 630 120 70 870 80 1,000 100 110 1,290 Total equity and liabilities 4,790 4,090 Statement of profit or loss for the year ended 30 September 2017 Revenue Cost of sales Gross profit Interest received Gross profit after interest received Operating expenses Administrative expenses Finance costs Profit before tax Income tax expense Profit for the year $000 2,794 (2,220) 574 40 614 (126) (124) (80) 284 (114) 170 The following supporting information is available: (0) Amortization amounting to $ 35,000 which relates to intangible assets of software was accounted in administrative expenses. (ii) Investments was neither impaired nor revalued. (iii) Revaluation reserve in the statement of financial position relates only to the non- current assets of property, plant and equipment. (iv) Accumulated depreciation for property, plant and equipment for the period ended 30 September 2017 and 30 September 2016 was $ 500,000 and $ 400,000 respectively (v) During the year, an equipment costing $ 225,000 with a net book value $ 185,000 was disposed for $ 150,000. (vi) There was issued of ordinary shares during the year at a premium. (vii) A dividend of 10 cents per share was paid on 01 September 2017. REQUIRED (a) Prepare, using the indirect method, a statement of cash flows for Charmer for the year to 30 September 2017 in accordance with IAS 7 Statement of cash flows. (25 Marks) (b) In recent years many analysts have commented on a growing disillusionment with the usefulness and reliability of the information contained in some companies' statements of profit or loss. Discuss the extent to which a company's statement of cash flows may be more useful and reliable than its statement of profit or loss

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting

Authors: Charles T Horngren, Gary L Sundem, William O Stratton, Howard D Teall, George Gekas

5th Canadian Edition

0131922688, 978-0131922686

More Books

Students also viewed these Accounting questions

Question

What do their students end up doing when they graduate?

Answered: 1 week ago