iCMA 43

1. At 31 December 2010 the capital section of The Business plcs balance sheet showed an ordinary capital of 10,000,000 equity shares of 25p each, and a share premium account of 1,000,000. On 30 June The Business plc made a 1 for 8 bonus issue, using the share premium account. Calculate the balance on the share premium account of The Business plc as at 31 December 2011.

iCMA 43

2. An accountant is making end of year adjustments in order to prepare the financial statements for Daweh Ltd. During 20X7, a machine which had cost 520,000 and which had an accumulated depreciation of 416,000, was sold for 100,000. At the end of 20X6, Daweh Ltds balance sheet shows a total machinery cost of 1,625,000 with a total accumulated depreciation on machinery of 675,000. Daweh Ltd depreciates its machines using the straight-line method over 10 years with no residual value. No depreciation is charged on a machine for the year in which that machine is sold.

Calculate the gain or loss on the disposal of the machine, and calculate the annual depreciation on machinery expense for 20X7.

Select one: Gain 4000. Annual depreciation expense: 105,000 Loss 3500. Annual depreciation expense: 105,000 Loss 4000. Annual depreciation expense: 110,500 Gain 3000. Annual depreciation expense: 110,000

iCMA 43

3. The following balance sheet and income statement extracts pertain to Ohlala Ltd.

Ohlala Ltd Balance sheet extracts as at:
	31.12.20X9	31.12.20X8
Current assets:
Inventory	199,000	205,000
Receivables	60,100	61,900
Prepayments	5,200	4,100
Current liabilities:
Payables	74,700	78,150
Accruals	1,500	2,250

Ohlala Ltd Income statement extract for
the period ended 31 December 20X9
Sales revenue	400,000
Less: cost of sales	(275,000)
Gross profit	125,000
Operating expenses*	(73,300)
Operating profit	51,700

*Operating expenses include 12,500 depreciation expense.

Calculate cash generated from operations during 20X9 using the indirect method.

Answer the question by providing the appropriate number in the box below (e.g., 123456). Do not enter a dot, commas, spaces, letters, words or symbols (such as ). Failure to follow these instructions will result in your answer being marked as incorrect.

Answer

iCMA 43

4. Which of the following statements about cash flow statements is not true?

Select one: a. The cash flow statement articulates with the opening and closing balance sheets by showing how the net increase or decrease in cash came about. b. A cash flow statement is used in combination with the balance sheet and the income statement in order to understand how the business has financed its operations and assets. c. Cash flows generated from operating activities are cash flows that derive from the primary revenue-producing activities of a business entity d. A cash flow statement is used to determine the profitability of a business over a period